Question

Each department is regarded as a distinct accounting entity when interdepartmental transfers are present in an organization.

Answer 1

In an organization, each department is considered a distinct accounting entity when interdepartmental transfers occur. This means that the transactions and financial activities within each department are treated separately from other departments.

Step-by-step explanation:

In an organization, each department is considered a distinct accounting entity when interdepartmental transfers occur. This means that the transactions and financial activities within each department are treated separately from other departments. For accounting purposes, each department is treated as a separate unit that has its own revenue, expenses, and assets.