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Branch Account-1

The document discusses branch accounting. It defines what a branch is and explains branch accounting. It outlines the objectives and types of branch accounting, including domestic and foreign branches. It also describes different systems for dependent branches, including debtors accounting systems.

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21 views

Branch Account-1

The document discusses branch accounting. It defines what a branch is and explains branch accounting. It outlines the objectives and types of branch accounting, including domestic and foreign branches. It also describes different systems for dependent branches, including debtors accounting systems.

Uploaded by

subashrao5522
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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BRANCH ACCOUNTS

Meaning of Branch

It is a unit to business. The business established its operations in different places with
different operations each unit Called branch.
Branch is a unit of business established by head office with the intention of expands the
business.

Meaning of Branch Accounting

It is a systematic process of identifying classifying Summarizing recording preparing and


maintaining of accounts relating to each branch.

A systematic method of recording accounting information or financial information relating to


particular branch Called branch accounting.

It is a System of recording and maintaining accounting information of each branch to


ascertain the financial position of branch.

Objectives of Branch accounting

1. To ascertain financial position or financial Conditions of each branch.


2. To ascertain profitability of each branch.
3. To Evaluating progress and performance of each branch.
4. Branch accounting helps to head office for making proper decision.
5. To ascertain amount of Commission payable to each branch.
6. It helps to maintain proper unit of control of each branch.
7. Branch Accounting helps to make proper Solutions to particular problems of branches
8 To know the Cash goods required to each branch.
9 To Create Good name and fame [goodwill] to each branch.
10. To Increase over all profits of the business.

Types Branches

1. Domestic Branches
2 foreign Branches

1.Domestic Branches :-These are the branches which are having head office and all the
branches located in the same country.
These are the branches where head office as well branches relating to same nation.
Types of Domestic Branches

1. Depended branches:
There are the branches completely depends upon the head office only under these branches
all the operations or accounting works Controlled by head office only. In addition all the
accounts and accounting works done by head office only.

A. Accounts for depended branches


1. Debtors accounting System
2. Stock and debtors accounting System
3. Final accounts Accounting System

1. Debtors accounting System.


Under this system the head office treated each branch has debtor at the end of accounting
period. Head office prepares branch account to find out profit or loss to the branch.
The Assets & liabilities of the branch at the beginning Treated as given by head office. The
head office can send the goods to the branch either cost price (or) invoice price under this
system find out the results of each branch under two ways.
1 .When the head office sends the goods to the branch at cost price
2. When the head office sends the goods to the branch at invoice price (or) loaded price (or)
inflated price.
1)When the head office sent the goods to the branch at cost price

Journal Entries in the books of Head Office

Date Particulars L/F Debit Credit


1 For Goods sent to branch
Bra Branch Account Dr XX
To To Goods sent to Branch Account XX

2 For Goods return by branch


Go Goods sent to Branch Account Dr XX
To Branch Account XX

3 For Amount Sent to Branch for expenses


Branch Account Dr XX
To Bank Account XX
4. For amount received from branch
Bank account Dr XX
To Branch account XX

5. For For Closing Goods sent to Branch Account


Good send to branch account Dr XX
To Purchase or Trading account XX

6. For Closing balance of Assets at the Branch


Branch Assets Account Dr XX
To Bank Account XX

7. For Closing balance of Liabilities at the Branch


Bank Account Dr XX
To Branch Liabilities Account XX

8. For Transferring Profit/ Loss to the General


Profit and loss Account
IF Profit
Branch Account Dr XX
To General Profit or Loss Account XX

If Loss
General Profit or Loss Account Dr XX
To Branch Account XX
Rule of Branch Account

Particulars Amount Particulars Amount


To Opening assets XX By Opening Liabilities XX
[op bal of Assets at branch ] [op bal of Liabilities at branch ]

“ Goods sent to branch account XXX “ Goods sent to branch Account XXX

[ With cost price of goods send [ cost price of goods return by


by head office to the branch] branch]

To Cash/Bank Account XXX By Cash/Bank Account XXX

[Amount of payment by branch ] [Amount of payment remitted


by branch to head office ]
“ Closing liabilities XXX “ Closing assets XXX

[ closing bal of liabilities of [ closing B/L of assets of


branch ] branch]
To General P / L Account XXX By General P &L Account XXX
[ Profit Transfer] [Loss transfer]

XXX XXX

Rule of Total Debtors Account

Particulars Amount Particulars Amount


To balance b/d XX By cash A/c XX
“Credit Sales XX [Received from debtors ]
“ Bills dishonored XX “Bills receivable XX
“ Creditors XX [Amt received from B/R]
“Bills endorsed dishonored XX “ Sales returns XX
“Cash /bank XX “Bad debts XX
[Paid to debtors]
“Carriage & other expenses XX “Balance c/d XX

XXX XXX

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