About This Chapter
Departmentalized Accounting - Chapter Summary and Learning Objectives
Accounting duties may include monitoring the outgoing and incoming capital for a business, but monitoring this process becomes more complex when you have multiple departments that each have individual accounting needs. This chapter offers an extended explanation of the departmentalized accounting process, including an overview of different transactions, recording procedures, and related terminology. Upon completing this chapter, you will have reviewed the following information:
- Implementing a departmentalized accounting system
- Accounting for cash payments, purchases, cash receipts, and sales
- Notating payments, purchase returns, and other allowances
- Procedures for the departmental payroll system
- Departmental gross profits calculations
- The preparation process for financial statements and other worksheets
|Departmentalized Accounting System: Definition & Example||Outline how this system is used to measure the cost effectiveness and profitability of a department.|
|Departmental Purchases & Cash Payments in Accounting||Explain related terminology, and evaluate typical accounting practices and concepts associated with cash payments and departmental purchases.|
|Recording Departmental Purchase Returns & Cash Payments||Appraise the recording process and demonstrate how to design sample journal entries.|
|Departmental Sales & Cash Receipts in Accounting||Outline associated concepts and terminology, then diagram the cash receipts and departmental sales procedures.|
|Recording Departmental Cash Receipts, Sales & Allowances||Illustrate the process of recording this information by drafting hypothetical journal entries.|
|Departmental Payroll System: Terms & Practices||Classify all payroll system keywords and concepts, and dissect the practices involved with using departmental payroll systems.|
|Completing Departmental Payroll Records in Accounting||Create journal entry examples of payroll transactions to distinguish the procedures for completing departmental payroll records.|
|Separating & Calculating Gross Profits by Department||Assemble a detailed explanation of gross profits and how to separate them for each department, and design a sample financial statement that highlights each department's gross profits.|
|End-of-Period Worksheet: Definition & Example||Point out the purposes of an end-of-period worksheet, explain the steps for creating this document, and construct a sample based on a departmentalized merchandising organization.|
|Preparing Financial Statements for Departmentalized Businesses||Differentiate between the different types of financial statements and the preparation process for each one, then design examples that could be used for a merchandising store with multiple departments.|
1. Departmentalized Accounting System: Definition & Example
A departmental accounting system allows management to assess the profitability of individual product lines and take appropriate action to ensure that profits are maximized and costs are controlled.
2. Departmental Purchases & Cash Payments in Accounting
When a business purchases goods and services, it records the purchase from and cash payments to its suppliers. In a departmental system, purchases and cash payments are tracked separately.
3. Recording Departmental Purchase Returns & Cash Payments
Recording purchase returns by department helps managers identify supplier quality problems. In this lesson, you'll learn how to record departmental purchase returns and cash payments.
4. Departmental Sales & Cash Receipts in Accounting
When a business sells a product or service, it must record the sale as well as the cash it receives from its customer. In a departmental system, a company must track these items separately. Learn how this system works with this lesson.
5. Recording Departmental Cash Receipts, Sales & Allowances
This lesson will cover how to use a double-entry accounting system. You are going to learn several new accounting terms and re-familiarize yourself with previously learned terms. Then, we'll put it all together so you can handle more of your business' accounting needs.
6. Departmental Payroll System: Terms & Practices
After reading this lesson, you will understand how you end up with a paycheck from your company's payroll department every pay period. Learn how they know how much to deduct and how much to pay you.
7. Completing Departmental Payroll Records in Accounting
Entering payroll information correctly into your accounting system is extremely important so your financial records are accurate. An accurate financial record may be in less danger of being audited.
8. Separating & Calculating Gross Profits by Department
In addition to evaluating the financial performance of the company overall, businesses need information on the profitability of each department. In this lesson, you will learn about calculating gross profit by department.
9. End-of-Period Worksheet: Definition & Example
An end-of-period worksheet is a crucial link between the planned budget and the factual balance sheet. In this lesson, we learn what appears on an end-of-period worksheet as well as how to create one
10. Preparing Financial Statements for Departmentalized Businesses
If you want to be sure that your company's figures are up to date and that your managers are providing you with unbiased information, then preparing financial statements for departmentalized business may be a valuable tool.
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Other chapters within the Accounting 302: Advanced Accounting course
- Business Ownership Types
- Key Accounting Concepts
- Journals & Ledgers in Accounting
- Accounting Equations & Formulas
- Financial Statements, Balance Sheets & Income Statements
- Analyzing Financial Statements
- Financial Statement Ratios
- Accounting for Inventory
- Accounting for Depreciation
- Accounting for Compensation, Taxes & Liabilities
- Adjustments & Closing Entries
- Corporate Accounting
- Taxation for Corporations
- Business & Financial Forecasting
- Required Assignments for Accounting 302
- Studying for Accounting 302