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JAMB Principles of Accounts 2004 Question 37

Question 37

Branch Accounts

Transfers from the head office to branches are best carried out at

  1. A.cost price
  2. B.selling price
  3. C.cost plus mark-up
  4. D.market price
Show the answer and explanation

Answer: C (cost plus mark-up)

Explanation

Goods are often invoiced to branches at cost plus a mark-up, so head office can control branch stock and margins.