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WAEC Financial Accounting 2016 Question 39

Question 39

Branch Accounts

The cost of goods returned by branch to head office is debited to

  1. A.Branch stock Adjustment Account.
  2. B.Goods sent to Branch Account.
  3. C.Branch stock Account.
  4. D.Branch Profit and Loss Account.
Show the answer and explanation

Answer: B (Goods sent to Branch Account.)

Explanation

Returns from the branch reduce goods sent to branch, so that account is debited and branch stock credited.