This document discusses three methods of departmental accounting: 1) The columnar basis method maintains a single set of books with department accounts recorded together in a columnar or tabular form to enable preparation of departmental trading and profit/loss accounts. 2) The independent basis method maintains separate accounts for each department, with each department preparing its own trading and profit/loss account which are then consolidated. 3) Inter-departmental transfers must be credited to the supplying department and debited to the receiving department, and if transfers are made at cost price then no further adjustment is needed.

1. DEPARTMENTAL ACCOUNTING
Submitted to~
MR. ANKIT SACHDEVA
ASST.PROF.
Submitted by~
Devendra Singh
BBA/II/17

3. 1. Columnar Basis:
 In this method, there is a single set of books.
All accounts of all the departments are
maintained together, but in a columnar or
tabular form. In order to enable the
preparation of departmental trading and
profit and loss accounts, various subsidiary
books, such as purchases, sales, returns
books, are prepared in a columnar form and
this shows the record, in detail, for each
department.

5.  In this method, accounts of each
department are maintained separately.
Each department prepares Trading and
Profit and Loss Account. Finally, the profit
or loss of each department is transferred
to the Profit and Loss Account for all the
departments. The independent
departmental book-keeping is an
expensive one.

7.  Goods are often supplied from one
Department to another that is Inter-
Departmental transfer. Such transfer must be
credited to Supplying Department and
debited to Receiving Department. If the
transfers are made at cost price, then it can
be treated as mere transfer. No further
adjustment is needed.

9. Illustration