Departmental accounting involves the process of providing accounting information analyzed by department, allowing each department of an organization to function independently as a cost center, revenue center, or profit center. This enables department managers to assess their department's financial performance effectively.
A single-capacity system in accounting refers to an accounting structure in which each activity or cost element is identified as serving only one purpose—either serving as a cost center or a revenue generator. Unlike the dual-capacity system, the single-capacity system does not recognize dual roles for cost centers or activities.
