Goods at branch marked down, or marked up by an amount, Financial Accounting

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GOODS AT BRANCH MARKED DOWN, OR MARKED UP BY AN ADDITIONAL AMOUNT

If goods at the branch are not selling well, branch could be authorized by the Head office to mark-down the goods. Conversely, if the goods are selling much better than expected, or if replacement goods will cost more, the selling price could be marked up. These mark-downs and mark-ups are credited or debited into the branch stock account and debited or credited into the branch mark-up account respectively.

Special care needs to be exercised in valuing closing stock.


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