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Branch accounts doubt

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Why are the items of memorandum branch trading and profit and loss account converted into cost price when the goods are invoiced to branch at selling price? Detailed explanation will be very helpful. 

Replies (1)
Coz inter branch transfers if recorded in sales price results in inflating the overall profit by itself...

Like Inter departmental transfer done in Departmental accounts...

The same is applied here...if we record it in sales price...obviously profit will be inflated beacuse of those inter branch transfer only...

To show correctness of profit...it is done


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