Departmental Accounts and Apportionment of Expenses for SS 3

Class: SS 3
Term: First Term
Week: 9
Age: 16 years
Duration: 45 minutes
Subject: Financial Accounting
Curriculum Theme: Financial Accounting Principles
Previous Lesson: Preparation of Joint Venture Accounts
Topic: DEPARTMENTAL ACCOUNT
Subject Matter: Meaning/definition; Basis for apportionment of expenses; Advantages of departmental account

Specific Objectives

By the end of the lesson, pupils/students should be able to:

Cognitive Domain

• Define departmental account.
• State at least three bases for apportionment of expenses.
• List at least three advantages of departmental account.
• Explain how different expenses are apportioned in departmental accounts.

Affective Domain

• Appreciate the importance of departmental accounts in business decision-making.
• Participate actively in discussions on the appropriate basis for expense apportionment.

Psychomotor Domain

• Prepare a simple illustration of expense apportionment for departmental accounts.

Reference Materials

The following resources were used in planning this lesson:

• 2025 Revised 9 Years Basic Education Curriculum
• Relevant State Unified Scheme of Work
• A suitable Financial Accounting textbook for SS 3
• The HeadTeacher Scheme of work

Instructional Materials

The teacher will teach this lesson with the aid of:

• A chart showing examples of departmental expenses and apportionment bases.
• Flashcards with accounting terms related to departmental accounts.
• Whiteboard and markers.
• Textbooks and notebooks.

Rationale for the Lesson

This lesson is essential for students to understand how large businesses with multiple departments track their financial performance. It helps in evaluating the profitability of individual departments and making informed management decisions. Mastering departmental accounts provides a clearer picture of cost allocation and revenue generation within an organization.

Prerequisite/Previous Knowledge

Students should have a basic understanding of general accounting principles, types of expenses, and the preparation of trading, profit and loss accounts.

Lesson Content/Board Summary

DEPARTMENTAL ACCOUNT

Meaning of Departmental Account

Departmental accounts are separate accounts maintained for each department of a business to ascertain the profit or loss made by each department. This helps management to evaluate the performance of individual departments and make better decisions regarding resource allocation and operational efficiency.

Basis for Apportionment of Expenses

Expenses that are common to all departments (indirect or overhead expenses) must be apportioned among them on a fair and logical basis. The basis for apportionment depends on the nature of the expense. Common bases include:

1. Rent, Rates, and Taxes: Apportioned based on floor area occupied by each department.
2. Lighting and Heating: Apportioned based on floor area or number of light points in each department.
3. Salaries and Wages (General): Apportioned based on the number of employees or time spent by employees in each department.
4. Depreciation of Assets: Apportioned based on the value of assets used by each department.
5. Insurance of Stock: Apportioned based on the average value of stock held by each department.
6. Selling Expenses (e.g., Advertising): Apportioned based on sales turnover of each department.
7. Carriage Inwards: Apportioned based on purchases of each department.
8. Carriage Outwards: Apportioned based on sales of each department.
9. Repairs and Maintenance: Apportioned based on the value of assets or direct usage by each department.

Advantages of Departmental Account

Maintaining departmental accounts offers several benefits to a business:

1. Performance Evaluation: It helps in assessing the profitability and efficiency of each department individually.
2. Decision Making: Management can make informed decisions regarding expanding, contracting, or closing a department.
3. Resource Allocation: It aids in allocating resources effectively to profitable departments.
4. Motivation: It can motivate departmental managers to improve performance by making them accountable for their department’s results.
5. Comparison: It facilitates comparison of performance between different departments and with industry benchmarks.
6. Cost Control: It helps in identifying and controlling costs specific to each department.

Teaching Methods/Instructional Techniques

Explanation, Discussion, Question and Answer, Guided Practice, Illustration.

Instructional Procedures

Step 1: Introduction

Time: 5 minutes

Teaching Skill: Explaining/Questioning

Teacher’s Activity: The teacher greets the students and reviews the previous lesson briefly. The teacher then introduces the topic by asking students how a large supermarket with different sections (e.g., groceries, electronics, clothing) might track the performance of each section separately. This leads to the concept of departmental accounts.

Pupils’ Activity: Students respond to questions and listen attentively to the introduction of the new topic.

Learning Point: Link to previous accounting

Step 2: Explanation of Departmental Account

Time: 10 minutes

Teaching Skill: Explanation/Definition

Teacher’s Activity: The teacher defines departmental accounts, explaining why businesses maintain them. The teacher uses examples of multi-departmental businesses to make the concept clear.

Pupils’ Activity: Students listen, ask questions for clarification, and take initial notes.

Learning Point: Meaning of departmental account

Step 3: Discussion on Basis for Apportionment of Expenses

Time: 10 minutes

Teaching Skill: Discussion/Illustration

Teacher’s Activity: The teacher explains that some expenses are common to all departments and need to be shared. The teacher then introduces the concept of “basis for apportionment” and provides examples of different expenses, asking students to suggest a fair way to share them (e.g., rent based on space).

Pupils’ Activity: Students actively participate in the discussion, suggesting bases for apportionment and asking questions.

Learning Point: Expense apportionment bases

Step 4: Practical Apportionment Illustration

Time: 5 minutes

Teaching Skill: Demonstration/Problem Solving

Teacher’s Activity: The teacher uses the chart or whiteboard to illustrate a simple scenario of apportioning an expense (e.g., rent) among two departments based on their floor area. The teacher demonstrates the calculation step-by-step.

Pupils’ Activity: Students observe the illustration, follow the calculations, and ask questions.

Learning Point: Practical expense apportionment

Step 5: Explanation of Advantages of Departmental Account

Time: 5 minutes

Teaching Skill: Explanation/Listing

Teacher’s Activity: The teacher explains the various advantages of maintaining departmental accounts, such as performance evaluation, better decision-making, and resource allocation. The teacher encourages students to think of other benefits.

Pupils’ Activity: Students listen, contribute ideas, and note down the advantages.

Learning Point: Benefits of departmental accounts

Step 6: Guided Practice

Time: 3 minutes

Teaching Skill: Questioning/Reinforcement

Teacher’s Activity: The teacher gives a quick scenario and asks students to identify the most suitable basis for apportioning a particular expense (e.g., “How would you apportion electricity bill between departments A and B?”).

Pupils’ Activity: Students provide answers and justify their choices.

Learning Point: Applying apportionment bases

Step 7: Evaluation/Review

Time: 5 minutes

Teaching Skill: Questioning/Assessment

Teacher’s Activity: The teacher evaluates the learning by asking the following questions:

1. What is a departmental account?
2. Mention three bases for apportioning expenses.
3. State two advantages of maintaining departmental accounts.
4. How would you apportion general manager’s salary to different departments?

Pupils’ Activity: Pupils answer orally and in writing.

Learning Point: Understanding departmental accounts

Step 8: Note-Taking

Time: 4 minutes

Teaching Skill: Guided Writing

Teacher’s Activity: The teacher guides pupils/students to copy the essential Board Summary notes on the meaning, apportionment bases, and advantages of departmental accounts into their notebooks.

Pupils’ Activity: Pupils/students copy the notes carefully into their notebooks.

Learning Point: Recording lesson notes

Step 9: Conclusion

Time: 3 minutes

Teaching Skill: Summarizing

Teacher’s Activity: The teacher briefly summarizes the key points of the lesson, reinforcing the importance of departmental accounts for effective business management and encouraging students to review their notes.

Pupils’ Activity: Students listen and ask any final questions.

Learning Point: Lesson consolidation

Continuous Assessment/Further Study

Type: Homework

Instruction: Answer the following questions in your notebook.

1. Define departmental accounts in your own words.
2. List five common expenses and their appropriate bases for apportionment in departmental accounting.
3. Explain how departmental accounts can help a business improve its overall profitability.

Lesson Keywords

• Departmental Account – Separate accounts for each department to determine individual profit/loss.
• Apportionment – The process of distributing common expenses among different departments.
• Overhead Expenses – Indirect costs that cannot be directly traced to a specific department or product.
• Floor Area – A common basis for apportioning rent, rates, and lighting expenses.
• Sales Turnover – A common basis for apportioning selling expenses like advertising.

Differentiation

For weaker learners: Provide simplified examples of expense apportionment with fewer departments and expenses. Use visual aids like diagrams to illustrate the concept of sharing costs. Focus on defining key terms and identifying common apportionment bases.

For faster learners: Challenge them with more complex scenarios involving multiple expenses and departments. Ask them to research and present on specific challenges in departmental accounting or different methods of departmental performance evaluation.

Suggested Lesson Videos

For further understanding, search on YouTube for: “Departmental Accounts SS3 Financial Accounting” or “Apportionment of Expenses in Departmental Accounts”.

Teacher Guide for Using This Lesson Plan

Before the lesson, ensure you have your chart ready with examples of departmental expenses and their apportionment bases. Review the concepts of direct and indirect expenses to provide a solid foundation. Guide students through the explanation of departmental accounts, emphasizing their practical application in real-world businesses. During the apportionment discussion, encourage student participation and guide them towards logical bases for different expenses. Use the practical illustration to clarify the calculation process. When students are copying notes, ensure they understand the content, not just transcribe it. Pay attention to any misconceptions during the evaluation and provide immediate feedback. Encourage further reading and practice for continuous learning.