The transfer of goods between departments is recorded be debiting

The transfer of goods between departments is recorded be debiting

Answer Details

When goods are transferred from one department to another within the same organization, it is recorded in the accounting system as an internal transaction. To record this transaction, the department that is giving the goods will debit the receiving department and credit its own account. In other words, the giving department will decrease its own inventory (assets) and the receiving department will increase its inventory (assets). This ensures that the movement of goods between departments is properly accounted for and the inventory records are up to date.