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The transfer of goods between departments is recorded by debiting

Accounts - Principles of Accounts
JAMB 2025

The transfer of goods between departments is recorded by debiting

  • A. stock account and crediting trading account
  • B. trading account and crediting purchases account
  • C. the receiving department and crediting the giving department
  • D. the giving department and crediting the receiving department
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Correct Answer: Option C
Explanation

When goods are transferred between departments, the receiving department is debited (receiving an asset), and the giving department is credited (giving up an asset). This follows the double-entry principle. Therefore, the correct treatment is debiting the receiving and crediting the giving department.


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