passwella.
Menu

WAEC Financial Accounting 2000 Question 17

Question 17

Branch Accounts

The entries necessary for recording profit loading on goods sent to branch are

  1. A.debit Branch Stock Account, credit Branch Stock Adjustment Account
  2. B.credit Branch Stock Adjustment Account, debit Goods sent to Branch Account
  3. C.debit Goods sent to Branch Account, credit Branch Stock Account
  4. D.debit Branch Stock Adjustment Account, credit Branch Stock Account.
Show the answer and explanation

Answer: B (credit Branch Stock Adjustment Account, debit Goods sent to Branch Account)

Explanation

Goods sent are first recorded at selling price; the loading is then taken out of goods sent to branch (debit) and credited to branch stock adjustment.