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FAQs on Departmental Accounts - Past Year Questions - B Com
| 1. What is a departmental account? |  |
Ans. A departmental account is a type of accounting system that records financial transactions and information for each department within an organization separately. This system allows the organization to track the performance of each department and make informed decisions about resource allocation and budgeting.
| 2. What is the difference between a departmental account and a general account? | |
Ans. The main difference between a departmental account and a general account is that a departmental account tracks financial information for each department within an organization separately, while a general account records financial information for the entire organization. Departmental accounts provide more detailed information about the performance of each department, while general accounts provide an overview of the organization's financial health.
| 3. What are the advantages of using departmental accounts? | |
Ans. There are several advantages of using departmental accounts, including the ability to track the performance of each department, identify areas of inefficiency, and make informed decisions about resource allocation and budgeting. Departmental accounts also allow for more accurate cost allocation, as costs can be assigned to the department that incurred them.
| 4. What are the challenges of using departmental accounts? | |
Ans. While departmental accounts offer many benefits, they also present some challenges. One of the main challenges is the complexity of maintaining separate accounts for each department, which can be time-consuming and require specialized accounting knowledge. Additionally, departmental accounts may not provide a complete picture of the organization's financial health, as they focus on individual departments rather than the organization as a whole.
| 5. What types of organizations commonly use departmental accounts? | |
Ans. Departmental accounts are commonly used by large organizations with multiple departments, such as universities, hospitals, and government agencies. These organizations often have complex financial structures and need to track the performance of each department separately in order to make informed decisions about resource allocation and budgeting.
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