Question

When goods are invoiced to branch at selling price, the value of goods is adjusted by: debiting goods sent to branch account.​

Answer 1

Answer:

the invoices to the branch are r cannot know how much profit is being made. If invoice is prepared at selling prices, there is another advantage. By making out the invoices at selling prices—prices at which goods will be sold to the customers—stock control at branch becomes easy, specially if the articles handled by the branch are numerous.

Suppose, goods worth Rs 20 lakh (selling price) are sent to the branch. The branch makes sales to the extent of Rs 4 lakh. Then the value of the stock at branch at the end of the period at selling prices should amount Rs 4 lakh. The branch will send a statement to the head office containing the list of all the items in stock together with the quantity in stock.