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JAMB Principles of Accounts 2012 Question 36

Question 36

Branch Accounts

Which of the following methods of invoicing goods to branches facilitate easy checks on the activities of branches?

  1. A.cost price
  2. B.fixed percentage on cost
  3. C.selling price
  4. D.invoice price.
Show the answer and explanation

Answer: C (selling price)

Explanation

If goods go to the branch at selling price, head office knows what the stock should sell for and can check it against sales and stock left.