The objective of departmental account is to?

A. ascertain the amount of profits or losses for the enterprise
B. ascertain the amount of profits or losses for each department
C. ascertain the cost of running the organization
D. offset the loss of each department

Correct Answer:

Option B – ascertain the amount of profits or losses for each department

Explanation

The main objectives of departmental accounting are: To check out an interdepartmental performance. To evaluate the performance of the department with the previous period result. The gross profit of each department can be ascertained.