To record the transfer of stock from one department to another, the correct entry would be to debit?

Assessment: JAMB UTME - Principles of Accounts - 1999 Subject: Financial Accounting

Question 1 Report

To record the transfer of stock from one department to another, the correct entry would be to debit?
Answer Details
The correct entry to record the transfer of stock from one department to another would be to debit the department receiving the goods and credit the department transferring the goods. This is because the department receiving the goods is increasing its inventory, and the department transferring the goods is decreasing its inventory. Therefore, the entry should reflect this movement of stock between the two departments. The other options do not correctly account for the transfer of stock between departments.
Read lesson note on Departmental Accounts (JAMB)
Read lesson note on Introduction To Company Accounts (JAMB)
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