Departmental Accounting MCQs [Multiple Choice Questions and Answers 2025 Free PDF]

Departmental Accounting MCQs
Multiple Choice Questions and Answers
For BCOM, MCOM, CMA Intermediate and Junior Accountant Exam

In this page, you will get Departmental Accounting MCQs Multiple Choice Questions and Answers which are useful for BCOM, MCOM, UKPSC Assistant Accountant Exam and Various Professional Exams Like CA/CMA and CS.

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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.

1. Departments are located in:

a) Same place

b) Another city

c) Outside state

d) Foreign country

Ans: a) Same Place

2. When the accounts of all departments are maintained together, in columnar form, it is known as:

a) Unitary method

b) Independent form

c) Single entry

d) Columnar form

Ans: d) Columnar form

3. In departmental accounting, where separate books are kept for each Department, it is commonly referred to as:

a) Independent accounting

b) Columnar accounting

c) Consolidated accounting

d) Single entry system

Ans: a) Independent accounting

4. Sales are the basis of apportionment in the case of:

a) Travelling salesman’s commission

b) Freight outwards

c) After sales service

d) All of the above

Ans: d) All of the above

5. Find the Loading which is 20% of the invoice price of goods if the cost price of goods is 40,000:

a) 4,000

b) 6,000

c) 10,000 (40,000*20/80)

d) 12,000

Ans: c) 10,000 (40,000*20/80)

6. If the Invoice price of closing stock is Rs3, 60,000 what amount should be transferred to Stock Reserve given Loading is 20% of Invoice price:

a) 60,000 (3, 60,000*20/120)

b) 1, 20,000

c) 40,000

d) 10,000

Ans: a) 60,000 (3, 60,000*20/120)

7. Departmental Accounting facilitates:

a) Comparison of trading results

b) Intelligent planning and control

c) Evaluating departmental performance

d) All of the above

Ans: d) All of the above

8. Expenses which cannot be reasonably allocated to any particular department are taken in:

a) Debtors account

b) Creditors book

c) Balance sheet

d) General Profit and Loss Account

Ans: d) General Profit and Loss Account

9. State the basis of allocation of expenses amongst 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, Advertisement.	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

10. There are two methods for preparing departmental accounts – Independent accounting and columnar form.   True

11. Departmental Accounts are prepared to know separately the profits of each department.

12. Departmental Accounts are prepared to ascertain departmental efficiency.

13. Difference between Independent accounting and columnar method:

Independent method	Columnar method
1. Followed by very large organisation like insurance companies	1. Followed by small concerns
2. Each department is treated as a separate unit and accounts are kept independently	2. Under this method, the entire account are maintained by a central accounts department
3. This method is costly and rarely used.	3. This method is less costly.

14. There are two types of department – Dependent and independent department.      True

15. 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.                True

16. Independent Department is those departments which work independently of each other and have negligible inter departmental transfer. True

17. When one department transfer goods to another department, the journal entry to be passed: Receiving department account debited and supplying department credited.    

18. When goods are transferred from one department to another department at market price, unrealised profit in the unsold goods must be transferred to stock reserve account.

19. Expenses which are shown in General Profit and loss Account includes:

a) Debenture interest

b) Dividend

c) Unrealised profit on closing stock (Debited)

d) Unrealised profit on opening stock (Credited)

Ans: All of the above

20. Dual pricing System: In dual pricing system, buying department is debited with the cost price and selling department credited with the market price.

You Can also Download Financial Accounting MCQs which includes Departmental Accounting MCQs from here.

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