Branch Accounting

Theory of Branch Accounting

Advance Financial Accounting

Q. What is the Objective of Branch Accounting?

Ans. Main objective of keeping branch accounting depend on the nature of branch and specific need of particular branch.

Objective :-

i) To know profit or loss of each branch separately.

ii) To ascertain financial position of each branch on a particular date.

iii) To know the cash & good requirement of various department.

iv) To evaluate the progress and performance of each branch.

v) To know the profit availability of each branch.

vi) To give concrete solution for the improvement of various branch.

Q. What is Debtor System?

Ans. Under this system Head Office open a separate Account for each branch in order to record all transaction related to Branch Debtor.

Q. What is final Account System?

Ans. Under this system Head Office open a trading & P/L A/C to find out P/L of each branch.

Q. What is Stock and Debtor System?

Ans. Under this system Head Office open various A/C such as Branch Stock A/C, Branch P/L A/C, Branch expenses A/C, Branch Adjustment A/C, etc in order to find out P/L on each branch.

Q. What is Wholesale Branch System?

Ans. Under this system Head Office also supply goods to wholesale at same price as it is charged to various branch.

Q. What is Branch Adjustment A/C?

Ans. This account is opened by Head Office when good are maintain under stock & debtor system. This account is started with loading included in opening stock and end with loading included in closing stock.

Loading on good sent is credited and loading on good return is debited. Its credit balance shows/represent branch gross profit and debit balance represent gross loss.

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