GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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goods may be invoiced to branches at cost
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goods may be invoiced to branches at selling price
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selling price method is a adopted where goods would be sold at a fixed price by the branches
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goods can never be invoiced to branches at wholesale price or arbitrage price
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Detailed explanation-1: -Detailed Solution. The correct answer is Goods can never be invoiced to branches at wholesale price or arbitrage price.
Detailed explanation-2: -Methods of charging goods to branches: goods may be invoiced to branches either at cost or at invoice price (cost+ certain percentage of profit). Goods may be invoiced at invoice price on the following reasons. (a) To hide the cost price from competitors, if possible.
Detailed explanation-3: -Memorandum Branch Debtors Account has to be prepared to find out missing figure. This account is prepared on the same pattern on which Total Debtors Account is prepared under Single Entry System.
Detailed explanation-4: -In branch accounting, each branch (defined as a geographically separate operating unit) is treated as an individual profit or cost center. Its branch has its own account. In that account, it records such items as inventory, accounts receivable, wages, equipment, expenses such as rent and insurance, and petty cash.
Detailed explanation-5: -Dependent branches. Independent branches. Foreign branches.