Financial Accounting Notes: Branch Accounting and Departmental Accounting | Theory Notes | Meaning - Features - Advantages - Limitations - Accounting Procedure and System

Branch Accounting and Departmental Accounting Theory Notes
For B.Com 1st Sem/CMA/CA/CS Examination

Meaning and Features of Branch and Branch Accounting

Branch and Its features

The dictionary meaning of the word branch is any subordinate division of a business, subsidiary shop, office etc. According to the provisions contained in sec2(14) of the Companies Act 2013 it would appear that a branch is any establishment carrying on either the same or substantially the same activity as that carried on by head office of the company.

A branch is a separate segment of a business. In order to increase the sales, business houses are requires to market their products over a larger territory and may generally split their business into certain divisions or parts. These various parts or divisions may be located in different part of the same city or in different cities of the same country or in different countries in the world. These are known as branches. The head office controls the activities of various branches.

Table of Contents – Branch and Departmental Accounting

Branch Accounting 1. Meaning of Branch and Its Features 2. Meaning of Branch Accounting and its Features 3. Objectives or Purposes of Branch Accounting 4. Advantages and Disadvantages of Branch Accounting 5.Types of Branch and Their Accounting Treatment a)     Dependent Branch b)     Independent Branch c)      Foreign Branch 6. Journal Entries in Case of Dependent Branch 7. Journal Entries in Case of Independent Branch 8. Difference between Dependent Branch and Independent Branch 9. Branch Accounting Solved Practical Problems Also Read: Branch Accounting MCQs Departmental Accounting 1. Meaning of Departmental Accounting System 2. Purpose or Objectives of Departmental Accounting 3. Advantages and Disadvantages of Department Accounts 4. Types of Department 5. Methods and Types of Departmental Accounting 6. Allocation of all Expenses and Incomes in Departmental Accounts 7. Inter departmental transfers 8. Calculation and Treatment of Unrealized Profit in Departmental Accounting 9. Difference between Departmental Accounts and Branch Accounts 10. Departmental Accounting Problems and Solutions Also Read: Departmental Accounting MCQs

Features of Branch:

a)      All branches are controlled by a central office known as head office.

b)      A branch does not have a separate legal entity distinct from the head office.

c)       Capital in branch is invested by the head office for acquisition of various assets.

d)      Managing director /Authorised person to operate a branch and maintenance of branch accounts are normally appointed by head office.

e)      Branch may dependent, independent or foreign branch.

Branch accounting and its features (👆)

Branch accounting is the process through which the accounting system of a branch is maintained. Branch accounting system is different for dependent, independent and foreign branch.

Features of Branch Accounting:

a)      Dependent branch do not maintain complete set of accounts. Accounts of dependent branch are maintained by head office.

b)      Branch account is nominal in nature and it is normally prepared to find profit or loss of each branch.

c)       If goods are sent at invoice price to the branch, the profit included in the amount of goods sent is eliminated while preparing branch account.

d)      Independent branch keeps full system of accounting at its place.

e)      Reconciliation of accounts of independent branch and foreign branch are made before finalizing the accounts of head office.

Purpose or Objectives of Branch accounting (👆)

The main objectives and purpose of Branch accounting system are listed below:

a)      To ascertain the profit or loss of each branch separately.

b)      To ascertain financial position of each branch on a particular date.

c)       To evaluate the progress and performance of each branch.

d)      To have comparison of the results of a particular branch with previous year and also with the other branch of the same concern.

e)      To differentiate between profit making and loss making branch so that necessary steps can be taken to improve the performance of loss making branches.

f)       To help the proprietor in formulating policy to expand the business on proper lines so as to optimize the profits of the concern.

g)      To allow branch managers’ commission on the basis of the profits of their branches; and

h)      To generate information, which may be helpful for planning, control, and evolution of performance of each branch and for taking various managerial decisions.

i)        To meet the requirements of specific enactments as all branches of company must keep the accounts for audit purposes.

Advantages and Disadvantages of Branch Accounting (👆)

Importance and Advantages of Branch Accounting are listed below:

a)      Profit or loss of each branch can be found out.

b)      They help in controlling branches.

c)      Actual financial position of the business can be found out on the basis of head office and branch accounts.

d)      Commission payable to the manager of branch can be ascertained with the help of branch.

e)      Branch requirements of goods and cash can be estimated with the help of branch accounting.

f)       Evaluation of progress and performance of each branch can be done with the help of branch accounting.

g)      Inter branch and intra branch comparison can be done to assess the performance of each branch.

h)      Suggestions for increasing the efficiency of the branch can be sent on the basis of branch accounts.

i)        They help in complying with the requirements of law because accounts are maintained as per the requirement of Company’s act 2013.

Disadvantages / Problems and limitations of Branch Accounting:

a) In case of foreign branch, conversion of foreign currency into domestic currency cannot be properly done due to regular fluctuations in exchange rate.

b) There are certain expenses which are incurred for the organisation as a whole but cannot be attributable to the branches.

c) Separate Accounts for each branch are maintained which increases the accounting charges.

Also Read: Royalty Accounts MCQs

Big Question how many Types of Branch Accounting? (👆)

Types of Branch: From the accounting point of view, branches may be classified into

a)      Dependent Branch

b)      Independent Branch

c)      Foreign Branch

(a) Dependent Branch: The term ‘Dependent Branch’ means a branch which does not maintain its own set of books. All records have to be maintained by the head office. When the business policies and the administration of a branch are wholly controlled by the head office, its accounts also are maintained by it. In such a case, Branch accounts are written up at the head office out of reports and returns received from the branch.

The following are the main features of dependent branches:

a.      Such branches sell only those goods which are received from the head office and are not usually allowed to make purchases in the open market except with the express permission of the head office.

b.      Goods are supplied by the head office to such branches either at cost price or at invoice price.

c.       All expenses of the branch such as rent, salary of staff, advertisement etc., are paid by the head office.

d.      Petty expenses such as cartage, entertainment, freights etc. are paid by the branch manager out of petty cash book balance. Such book is maintained at the branch either as simple petty cash book or on Imprest system.

e.      The amount received from cash sales or cash received from debtors is either remitted to the head office daily or deposited in the account of the head office in some local bank.

f.        The branch manager is normally expected to sell the goods for cash only but he may be authorized to sell goods on credit as well.

Methods of Branch Accounting – Dependent Branch (👆)

In case of a dependent branch, the head office may keep accounts of the branch acc to any of the following systems

1)      Debtors System – Most Popular Method

2)      Stock and Debtors system

3)      Wholesale System

4)      Final Account system 

(1) Debtors System (Synthetic Method): This system is adopted in case of branches of small size. Under this system, a branch account is opened separately for each branch in the books of head office. This account is nominal account in nature and is prepared to calculate profit and loss for each branch. The goods supplied by the head office to the branch may be either at cost price or at cost plus profit. Following entries are passed in the books of head office under this method:

Also Read: Hire Purchase and Installment Purchase System MCQs

Branch Accounting Entries in case of dependent branch in the books of head office: (👆)

Transactions	Debit / Credit
1. When Goods are sent to branch	Branch A/c Dr. To Goods Sent to Branch A/c
2. For return of goods to H.O.	Goods Sent to Branch A/c  Dr To Branch A/c
3. For Cheque or draft sent to branch for exp.	Branch A/c Dr To Bank A/c
4. For Cheque or Draft received for remittance	Bank A/c Dr To Branch A/c
5. For Closing Balance of Assets	Branch Assets A/c Dr To Branch A/c
6. For opening Balance of assets	Branch A/c Dr To Branch Assets A/c
7. For Closing Balance of Liabilities	Branch A/c To Branch Liabilities A/c
8. For opening Balance of Liabilities	Branch Liabilities A/c Dr To Branch A/c
9. For Branch Profit	Branch A/c Dr To General Profit and Loss A/c
10. For Branch Loss	General Profit and Loss Ac/ Dr To Branch A/c

Under this method, a separate branch account for each branch is prepared to find profit or loss of each Branch:

Particulars	Amount	Particulars	Amount
To Branch Assets (Opening balance) - Branch Cash - Branch Debtors - Branch Debtors - Branch Furniture To Goods Sent to Branch Less: Return to Head office To Bank (Expenses paid by HO) To Branch Liabilities (Closing Balance)		By Branch Liabilities (Opening Balance) By Bank (Remittance) - Cash Sales - Collection from debtors - Any cash realised at branch Less: Expenses paid by branch manager By Branch Assets (closing balance)

Treatment of Certain Branch Transactions in case of dependent branch

1.      Branch expenses paid by branch: If petty cash is maintained – deducted with petty cash balance and only closing balance shown in account. If petty cash is not maintained – deducted with remittance.

2.      Depreciation on fixed assets – Not shown in branch account.

3.      Credit sale, bad debts, sales returns, allowance and discount allowed – not shown in branch account but shown in branch debtor’s account.

4.      Goods in transit - Either shown on the both sides of the branch account or will be ignored totally.

5.      Losses due to pilferage, wastage and other losses of stock due to normal or abnormal – ignored while preparing branch accounting.

6.      Purchase of fixed asset by the branch.  If the branch has purchased any fixed assets, then on one hand branch account will be credited by the head office and on the other the remittance from the branch will be reduced by the amount. If branch has purchased the asset on credit basis and liability arising from such purchase will be shown on the debit side of branch account.

7.      Sale of Fixed Asset. If the sale is for cash, cash remittance will increase from the branch but asset will reduce in value to be shown on the credit side of the branch account as this is automatically adjusted through the above adjustments.

(2) Stock and Debtors System: Profit and loss of a branch can be found out by preparing branch account but there is another method for the same purpose. This method is known as stock and debtors method. If it is desired to exercise a more detailed account control over the working of a branch, the accounts of the branch are maintained under which is described as the stock and debtors method.

(3) Wholesale Branch System: Manufacturers may sell goods to the consumers either through the wholesalers and approved stockists or through their branches. In order to know whether self-retailing through branch is more profitable than wholesaling, it is necessary to make distinction between profit due to wholesale and profit due to retail business of the branch. Wholesale price is always less than retail price.

(4) Final Accounts System: The head office can also ascertain the profit or loss of a dependent branch by preparing branch trading and profit and loss a/c at cost. In such cases, the head office may also maintain a branch account. 

(b) Independent Branch and Their features (👆)

Independent branches are those which act independently within the broad policies framed by the Head office in conducting their day-to-day activities. These branches keep full system of accounting. They can purchase goods from the market, supply goods to the head office, pay cash expenses from the cash realised and deposit cash in their own account.

The main features of independent branches.

a)      They need not depend on the Head office for their requirements of supplies of goods. They can make purchases themselves. Of course, they can also obtain supplies of goods from the head office as and when they want.

b)      They can sell goods only for cash and credit at any price they consider profitable.

c)      They need not remit the money received by them from cash sales and debtors to the Head office periodically. They can retain the funds and meet their day-to-day expenses out of those funds. Finally, if they have surplus cash in their hands, they can remit the same to the Head office.

d)      They keep a complete set of books for recording their transactions. So, they can prepare their own Trial Balance, Trading and Profit and Loss Account and Balance Sheet.

e)      However, as they are ultimately responsible to the Head office, at the end of every financial period, they are required to submit a copy of their Trial Balance to the Head office.

Branch Accounting Entries (👆)

Treatment of some Specific Transactions in case of Independent Branch

(i) Cash in transit: If the cash sent by branch to H.O. or the cash sent by H.O. to branch has not been received by the other party upto the end of the year, it is known as cash in transit. There is a difference in the balances of two accounts on account of this transaction also. To reconcile the two balances, the following journal entry is passed:

In the books of head office	In the books of branch
Cash in Transit a/c Dr. To Branch a/c	Cash in Transit a/c Dr To Head office

At the beginning of the next year, reverse entry will be passed.

(ii) Goods in transit: When goods are dispatched by the head office to branch and the branch does not receive it even upto the end of the year, it is known as goods in transit. In the same way when goods are returned by branch to head office and the head office does not receive it upto the end of the year it is also known as goods in transit. It is quite understandable that a difference should arise in the balances of two accounts due to these transactions. Therefore, to reconcile, the following journal entry will be passed:

In the books of head office	In the books of branch
Goods in Transit a/c Dr. To Branch a/c	Goods in Transit a/c Dr To Head office

In the Balance Sheet of Head office both the above items will be shown as an asset.

(iii) Purchase of Fixed Assets: Generally the branch fixed assets are maintained in the books of head office. When an asset is purchased, the following entries are passed:

If payment if made by the branch:

In the books of head office	In the books of branch
Branch Fixed Assets A/c Dr To Branch A/c	Head Office A/c Dr To Cash

If payment if made by the HO:

In the books of head office	In the books of branch
Branch Fixed Assets A/c Dr To Bank A/c	No Entry

(iv) Depreciation on Fixed Assets: Often, the accounts of fixed assets of a branch are maintained in the head office books.  In such a case,

(v) Inter-Branch Transactions: Where there are number of branches, inter-branch transactions are likely to take place, e.g., cash or goods sent by one branch to another or expenses incurred by one branch on behalf of another.  Such transactions are usually adjusted assuming that they were entered into under the instructions from the H.O.  Suppose Kolkata branch transfers some goods to Mumbai branch under the directions of the H.O.  The entries will be as follows:

Note:    Inter-branch transactions without the knowledge of head office may be passed as between the branches only in the usual manner.

Difference between Dependent and Independent Branch (👆)

Basis	Dependent Branch	Independent Branch
Goods	Such branches sell only those goods which are received from the head office and are not usually allowed to make purchases in the open market except with the express permission of the head office.	They need not depend on the Head office for their requirements of supplies of goods. They can make purchases themselves. Of course, they can also obtain supplies of goods from the head office as and when they want.
Accounting	It does not maintain complete set of accounts except some subsidiary boos.	It maintains complete set of accounts.
Remittance of cash	Every dependent branch is required to remit cash to the head office.	Independent branch does not require to remit cash to the head office daily.
Expenses	All expenses of dependent branches are paid by head office. Branches are allowed only to maintain petty cash account for day to day expenses.	All expenses of independent branch are paid by the branch itself.
Trial balance	Trial balance is not required to be prepared.	Trial balance can be prepared with the help of complete set of accounts maintained by branch.
Reconciliation	Reconciliation of branch and head office account is not necessary as accounts are maintained by head office only.	Reconciliation of branch and head office account is necessary.
Accounting system	It follows single entry system.	It follows double entry system.

c) Foreign Branches and Its Incorporation in Head Office Book (👆)

When a branch is located in a country other than domestic country it is called a foreign branch. Such branch will keep its books of accounts in foreign currency. Foreign branch usually maintains a complete set of books under double entry principles. So, the accounting principles of a Foreign Branch will be the same as those applying to an Inland Branch. Before a Trial Balance of the Foreign Branch is incorporated in the H.O. books, it has to be converted into home currency.

Rules for conversion of branch trial balance into the books of head office: 

Following are the main rules which should be taken into consideration while converting the figures of foreign trial balance in the books of the head office for the purpose of their incorporation in the books of the head office:

1) If the rate of exchange will normally remain constant, the branch trial balance should be converted at a fixed rate of exchange.

2) In case of fluctuating rates of exchange, the following rules for conversion are applied:

Nature of Account

Exchange Rate Applicable

1. Fixed Assets 2. Fixed Liabilities 3. Current Assets & Liabilities 4. Remittances sent by the branch 5. Goods received from H.O. as well as goods returned to H.O. 6. The Nominal A/c’s (except next two) 7. Depreciation on Fixed Assets   8. Opening and Closing stocks   9. Balance in H.O. A/c

1. Rates ruling at the time they were acquired. 2. Rates ruling as on the date of the Trial Balance. 3. Rates ruling as on the date of the Trial Balance. 4. At the actual rates at which they were made. 5. At the rates ruling on the date of dispatch or the date of receipt. 6. Average rate ruling during the accounting period. 7. Rate of conversion applicable in case of the particular asset concerned [as indicated in (a) above]. 8. Rates ruling of on the opening and closing dates respectively. 9. Value at which the Branch A/c appears in H.O. books on the date.

Difference in Exchange: As a result of conversion of branch trial balance in home currency, a difference in the trial balance is will often arise. If a loss (Dr.) results, it should be debited to Profit & Loss A/c, if a profit (Cr.) results, the prudent course is to credit it to an exchange Reserve A/c so as to provide for future losses on exchange.

Departmental Accounting System

Meaning of Department and Departmental Accounting:  (👆)

Department: Department refers to activity centre (profit or cost centre) usually located in the same roof but carrying distinct type of activities.

Departmental Accounting: Department accounting is a system of financial accounting which is used in the organizations whose all works are done through their different departments or departmental stores.  Departmental accounts are prepared separately for each department and trial balance will also be prepared. Departmental P&l account is prepared to ascertain the profit or loss of each department separately and at the end of the year it is transferred to General profit and loss account of the whole organisation.

Purpose or Objectives of departmental accounting

The main objectives and purpose of departmental accounting system are listed below:

a)      To have comparison of the results of a particular department with previous year and also with the other departments of the same concern;

b)      To help the proprietor in formulating policy to expand the business on proper lines so as to optimize the profits of the concern;

c)      To allow departmental managers’ commission on the basis of the profits of their departments; and

d)      To generate information, which may be helpful for planning, control, and evolution of performance of each department and for taking various managerial decisions?

e)      To differentiate between profit making and loss making department so that necessary steps can be taken to improve the performance of loss making departments.

Advantages and Disadvantages of Department Accounts (👆)

Departmental Accounts Advantages are listed below:

a)      It provides an idea about the affairs of each department.

b)      It helps to evaluate the performance of each department.

c)      It helps to reward the Departmental mangers and staff on the basis of performance.

d)      It facilitates control over the working of each department.

e)      It helps to compare the result of one department with those of other departments.

f)       It helps the management to formulate the right business policies for the various departments.

g)      It will help in the preparation of departmental budgets.

h)      It helps to calculate stock turnover ratio of each department.

Departmental Accounts Disadvantages / Problems and limitations are listed below:

a) Apportionment of expenses between or amongst various departments is difficult due to which exact profit cannot be ascertained.

b) There are certain expenses which cannot be allocated on some equitable basis such as debenture interest, dividend, share transfer fees, general office expenses, income tax etc. and thus should not be apportioned.

c) Separate Accounts for each department are maintained which increases the accounting charges.

Types of Department (👆)

There are two types of department

a) Dependent Department: Dependent department are those which transfer goods from one department to another department for further processing. Here, the output of one department becomes the input for the other department. These transfers may be done at cost or pre-decided market price. The price at which this is done is known as transfer price. In these departments unloading is required if the transfer price is having profit element. This is done by the passing the following entry:

Profit and Loss A/c                                          Dr

To Stock Reserve A/c

b)   Independent Department: Independent Department is those departments which work independently of each other and have negligible inter departmental transfer.

Methods and Types of Departmental Accounting (👆)

A departmental organization can record its transactions in two ways:

a) Unitary Method

b) Tabular or Columnar Method

a)      Unitary method: Under this method, the accounts of each department are kept separately. The results of the various departments are finally combined together in one general P & L account.

b)     Tabular or columnar method: Under this method, the accounts of each department are kept in columnar form with a separate column for each department and also with a separate column for the total. The tabular method is more popular and is adopted by almost all the departmental undertaking.

Under this method, at the end of the accounting year, Trading and P & L account (columnar) is prepared with separate amount column for each of the department and also for the total. The trading and P & L of a departmental organization kept in the columnar basis is called Departmental Trading and P & L account. In trading account, opening stock, purchases, direct expenses and Gross profit are debited and sales and closing stock credited. Indirect expenses have to be apportioned between the departments and debited to the P&L account.

Allocation of all Expenses and Incomes in Departmental Accounts (👆)

Departmental Expenses: The expenses of a business can be broadly divided into following two categories:

1. Direct expenses: Expense relating to a particular department is called direct expenses. They are charged to respective department. For example wages, staff salaries, material etc.

2. Indirect Expenses: Expenses relating to more than one department are called indirect expenses. They are further divided into:

(a) Expenses which can be allocated

(b) Expenses which cannot be allocated

Allocation and Apportionment of Departmental Expenses

(1) There are certain expenses which can be specially incurred for a particular department. Such expenses are charged directly to the department.

(2) There are certain expenses which are indirect in nature and incurred for the whole department. Such expenses are distributed amongst various departments on some suitable basis. The following table will help to know the proper basis for apportionment of some important expenses among various departments.

Expenses	Basis
a)   Sales expenses as traveling salesman, salary and commission, selling expenses after sales service, discount allowed, bad debts, freight outwards, provision for discount on debtors, sales manager’s salary and other benefits etc.	a) Sales of each department
b)   All expenses relating to building as rent, rates, taxes, air conditioning expenses, heating, insurance building etc.	b) Area or value of floor space
c)    Lighting	c)  Light points
d)   Insurance on stock	d) Average stock carried
e)   Insurance on plant & machinery	e) Value of plant & machinery
f)    Group insurance premium	f)  Direct wages
g)   Power	g) H.P or H.P x Hours worked
h)   Depreciation, Renewals & Repairs	h) Value of assets in each department
i)     Canteen expenses, Labour welfare expenses	i)   No. of employees
j)     Works manager’s salary	j)   Time spent in each department
k)   Carriage inwards	k) Purchases of each department

(3) There are certain expenses which cannot be allocated on some equitable basis such as debenture interest, dividend, share transfer fees, general office expenses, income tax etc. and thus should not be apportioned. Profits of all departments should be brought down in one total and such expenses should be debited and non-departmental profits credited to this without making any effort for its apportionment amount different departments in combined income account.

Allocation of incomes in Departmental Accounts

Common incomes should be allocated among different departments on the following basis:

a)      Discount received and reserve for discount on creditors: They should be allocated on the Basis of net purchases of each department.

b)      Commission earned on sales: It should be allocated on the basis of net sales of each department.

c)      Other incomes: Such as dividend received, transfer fees etc can be allocated equally. Alternatively, they can be credited to General P & L account.

Inter departmental transfers (👆)

Transfer of goods or services by one department to another department are called inter departmental transfers. When one department transfers goods to another department, the transaction should be considered as a sale for the supplying department and a purchase for the receiving department. As such, the supplying department should be credited and the receiving department should be debited with the value of goods supplied.

Similarly, when one department renders service to another department, the department rendering the service should be credited and the department receiving the service should be debited with the value of service rendered.

Goods may be transferred either at cost price or at selling price. If goods are transferred at selling price by the transferor department and such goods are unsold at the end of the accounting year by the transferee department, then profit charged on such unsold goods by the transferor department is treated as unrealized profit and it should be debited to the general profit and loss account as stock reserve. In the balance sheet stock reserve should be deducted from closing stock. If unrealized profit is contained in the opening stock, such reserve should be credited to the general profit and loss account.

Calculation and Treatment of Unrealized Profit in Departmental Accounting (👆)

To calculate Stock Reserve, the following steps must be followed:

Step 1: Calculate the value of IDT (inter Department transfer) by using the following formula: Closing Stock of Transferor dept x IDT / Total Direct expenses excluding op stock

Step 2: The value of step 1 denotes the Value of IDT stock included in Transferee dept. Now calculate the GP (Gross Profit) ratio at which transferor dept sells goods to transferee. i.e. this amount is at selling price. GP ratio is to be calculated on SP to eliminate Unrealized Profit i.e. St. reserve with the help of following formula:

GP ratio on sales = (GP of Transferor Dept / Total sales) /100

Where Total sales = Normal sales + IDT sales

Step 3: Result of Step 1 x Result of Step 2

Treatment: The following journal entry is to be passed to eliminate the amount of unrealized profit:

General P & L                                     A/c

              To Stock Reserve A/c

Note: In next year the stock reserve of current year will become realised and to be credited to P & L a/c

Difference between Departmental Accounts and Branch Accounts (👆)

The main difference between Departmental Accounts and Branch Accounts are given below:

Basis of Distinction	Departmental Accounts	Branch Accounts
Maintenance of Accounts	All accounts are maintained at one place & departmental trading and profit and loss account is prepared accordingly.	In case of branch, all branch accounts are kept at Head Office except cash, customers and stock registers are maintained at branch. But in case of independent branch all accounts are kept at branch and a branch prepares its own trading and Profit & Loss Account.
Allocation of Common Expenses	Departments are not geographically separated from each other, so problem of allocation of common expenses among different departments arises.	As branches are geographically separated from each other so the problem of allocation of common expenses among different branches does not arises.
Adjustments &  Reconciliation of Accounts	The question of adjustments and reconciliation of accounts does not arise in departmental accounts.	In case of independent branch some adjustments and reconciliation of head office and the branch accounts are required to be done at the end of the year.
Problem of foreign currency	The problem of conversion of foreign currency into home currency does not arise.	The problem of conversion of foreign branch figures may arise at the time of finalization of accounts of head office.
Reason for creation	Departments are the result of fast human life.	Branches are the outcome of tough competition and expansion of business.
Functional Division of accounts	Functional division is possible in case of departmental trading which is a must for the existence of a department.	It is not possible in case of a branch trading.
Segmentation and Condensation	Departmental Accounting is practically a segment of accounts.	Branch Accounting is a condensa­tion of accounts.

Conclusion: After Going through this comprehensive article on Branch Accounting and Departmental Accounting, i hope you will be familiar with the Branch Accounting and Departmental Accounting Procedure. These notes are useful for B.Com 1st Sem to 6th Sem Students. Thanks for Viewing our website regulrly.

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