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Departmental accounts please help
Accountancy
Can anybody please tell me "why do we transfer mark on inter departmental sales to markup account & don't transfer markup on sales?" Why actually markup account is prepared
Answers (1)
Markup is gross profit as a percentage of sales added to transfer price. When inter-department transfers are based on market price, the sale proceeds of the department are credited in Memorandum Departmental Stock account and amount of â??Mark upâ?? is credited to the Departmental Mark up Account such that only the cost of the product is identified as closing stock needs to valued at stock in financial statements
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