Departmental Income And Expense Statement

Departmental income statement helps to evaluate and control the operations of each department by showing each departments contribution margin and net income from operating after all expenses are allocated for mode 2011.

Departmental income and expense statement. Procedure expenses and inter departmental transfers. The income statement s primary purpose is to show the financial performance of a business. Not surprisingly the income statement is also known as the profit and loss statement. The income statement is a report showing the profit or loss for a business during a period as well as the incomes and expenses that resulted in this overall profit or loss.

A business may have a number of departments each dealing in a different type of goods. For example an annual income statement issued by paul s guitar shop inc. A business operates a retail store with two departments clothing and shoes. Would have the following heading.

Departmental accounts are accounts relating to the several departments or sections of a busi ness drawn up with a view to ascertaining their individual performances. The departmental income statement shows which departments of the company are the most profitable and which departments are costing the company money. The indirect costs are the costs incurred for the joint benefit of more than one department. All income statements have a heading that display s the company name title of the statement and the time period of the report.

P l expenses can also be formatted by the nature and the function of the expense. Department expense expense x department base quantity total base quantity department expense 15 000 x 5 000 30 000 2 500 the building insurance apportioned to department a is 2 500.