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WAEC Financial Accounting 2011 Question 37

Question 37

Branch Accounts

Goods sent to branch are recorded in the head office's books at I. selling price. II. cost price plus markup percentage. III. cost price.

  1. A.I and II only
  2. B.I and III only
  3. C.II and III only
  4. D.I, II and III
Show the answer and explanation

Answer: D (I, II and III)

Explanation

Head office may invoice goods to a branch at cost, at cost plus a mark-up, or at selling price; all three methods are used.