Which of the following is apportioned in proportion of the purchases of each department?

When apportioning expenses between departments, the basis chosen should reflect what actually drives that particular cost in each department. Discounts received from suppliers are earned in proportion to how much a department buys from those suppliers, since suppliers typically grant discounts based on the volume or value of purchases made.

For this reason, discounts received are apportioned between departments in proportion to each department's purchases: a department that buys more is the one that is generating more of the supplier discount, so it should be credited with a correspondingly larger share.

By contrast, carriage outwards and selling commission are better apportioned on the basis of sales, since both are costs connected with getting goods to customers and rewarding sales effort, which relate to how much each department sells rather than how much it buys. Bad debts are also more naturally linked to sales, since they arise from customers who bought on credit and failed to pay, so bad debts are usually apportioned in proportion to credit sales rather than purchases.

The general rule to apply: match the apportionment basis to the activity that actually generates the expense or income being shared, purchases for discounts received, and sales for carriage outwards, selling commission, and bad debts.