JAMB Accounting 2011 Objective — Question 34
Question 34 of 49 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2011 Objective paper, with the correct answer and a full explanation.
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The cost method of charging goods to branch is used where
- A. A. branch stock adjustment account is in use
- B. B. the retention of branch trading account is in addition to the cost of goods sold
- C. C. goods are sent without invoice or any source documents
- D. D. goods are of a perishable nature on which a pre-determined price is inapplicableCorrect
Explanation
If goods are perishable, it is best that the branch determines the price to avoid wastage, so the cost method (rather than a fixed invoice price) is used.
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