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JAMB Principles of Accounts 1999 Question 45

Question 45

Departmental Accounts

To record the transfer of stock from one department to another, the correct entry would be to debit

  1. A.goods outwards and credit goods inwards
  2. B.merchandise account and credit department stock account
  3. C.department transferring and credit department receiving
  4. D.department receiving and credit department transferring.
Show the answer and explanation

Answer: D (department receiving and credit department transferring.)

Explanation

The receiving department gains stock (debit) and the transferring department loses it (credit).