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The Institute of Chartered Accountants of India • 24d
This also happens with a company having multiple branches/authorised shops. They also work in the same way the head office sends the goods to the branch. And head office treats it as goods sent to the branch which is almost a sale. And the branch treats it as goods from the head office, which is ultimately a purchase. But here, Deepinder is building another company, which is a great move. Most companies, even Reliance and Tata, use this strategy. They purchase the product from their own company as it reduces their cost. Also, there are a few methods where the product cost and loading are treated.
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