Inter Dept Trnfr...

When one department supplies goods to another department, the supplying department should be credited and the receiving department debited.

Usually, goods are supplied at cost, but if goods arre supplied at selling price, a reserve will have to be created in respect of stock of such goods at the date of closing.

The reserve will equal the profit included in the transferred goods.

Sometimes, one department renders services to another department. In such a case also, the department rendering the services will be credited and the one receiving service debited.

Adarsh