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Branch Accounting - Independent branch - 24. Illustration - 8
Accountancy
In this above question, it is given goods are invoiced at Cost + 20% on sale price. While preparing trading account of the branch we are assuming the amounts given for opening stock and goods from H.O are at invoice price and so we are adjusting(reducing) the amounts to only cost values in trading A/c. Following the same assumption isn't it more logical to assume the goods returned to H.O are also in par with the goods received and assume they are at invoice price. Consequently shouldn't we adjust the returns amount to cost. kindly clarify.
Answers (2)
CA Suraj Lakhotia Admin
The question mentions that it is sent back at cost
Sorry I didn't notice that. Thanks for the reply sir.
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