MEMORANDUM STOCK AND MEMORANDUM MARK UP ACCOUNT METHOD
- Under this method, goods supplied to each department are debited to a Memorandum Departmental Stock account at cost plus a ‘mark up’ (loading) to give the normal selling price of the goods.
- The sale proceeds of the department are credited in Memorandum Departmental Stock account and amount of ‘Mark up’ is credited to the Departmental Mark up Account.
- When it is necessary to reduce the selling price below the normal selling price, i.e., cost plus mark up, the reduction (mark down) is entered in the Memorandum Stock account as well as in the Mark up account.
- This method helps to achieve effective control of stock movements of various departments.
No comments:
Post a Comment