Ch 13: Departmentalized Accounting

About This Chapter

In these lessons, distinguish the concepts and procedures used to manage departmentalized accounting. Study each lesson closely and pay special attention to the bold vocabulary terms. Assess your learning skills by taking the lesson quizzes.

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

Lesson Objective
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.

10 Lessons in Chapter 13: Departmentalized Accounting
Test your knowledge with a 30-question chapter practice test
Departmentalized Accounting System: Definition & Example

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.

Departmental Purchases & Cash Payments in Accounting

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.

Recording Departmental Purchase Returns & Cash Payments

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.

Departmental Sales & Cash Receipts in Accounting

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.

Recording Departmental Cash Receipts, Sales & Allowances

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.

Departmental Payroll System: Terms & Practices

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.

Completing Departmental Payroll Records in Accounting

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.

Separating & Calculating Gross Profits by Department

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.

End-of-Period Worksheet: Definition & Example

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

Preparing Financial Statements for Departmentalized Businesses

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.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Support