One of the reasons for keeping accounts is to provide information for the owners and management of the business. One of the important areas of information relates to the profitability of the business. It is obviously important to know the overall or total profit of the business, but in the case of a business running separate departments or selling distinct and separate products it is also useful to know the profit made by each department or earned by each product. This is the purpose of departmental accounts: to provide us with information regarding profitability of separate departments.
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