1)
The trading results of each department may help to evaluate the
performance of each department. The sales of that department which fives
maximum profit may be pushed up by special efforts.
2)
The profitability of each department may help the management for
taking decision whether to drop a department or add a new one.
3)
The growth potentials of a department can be evaluated by having
comparison with the other departments.
4)
The users of accounting information can be provide mode detailed
information like the shareholder, investors, creditors etc.
5)
The overall profits of the organization can be increased by
having friendly rivalries between different departments.
6)
The departmental managers and staff can be suitably rewarded on
the basis of the departmental results.
7)
It helps the management to determine the justification of proper
use of capital invested in each department.
8)
It helps to have comparison of various expenses of each
department with the previous period or with other departments of the same
concern.
9)
It helps to know he efficiency of each department by calculating
stock turnover ratio of each department to reveal the fast or slow moment of
various items of stock.
10)
The information provided by departmental accounts may be helpful
to the management for future intelligent planning and control.