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WAEC Financial Accounting 2008 Question 29

Question 29

Branch Accounts

Mark-up on goods sent to branch are recorded in the books by crediting

  1. A.Stock Adjustment Account; debiting Branch Stock Account
  2. B.Goods sent to Branch Accounts; debiting Branch Stock Account
  3. C.Bank Stock Account; debiting Stock Adjustment Account
  4. D.Branch Stock Account; credit Cash Account.
Show the answer and explanation

Answer: A (Stock Adjustment Account; debiting Branch Stock Account)

Explanation

The mark-up (loading) is credited to the branch stock adjustment account.