How are inter-branch transactions recorded in branch?
The accounting entries for such inter-branch transactions can be routed in one of the following ways: Directly – where each branch will have a direct accounting relationship with all other branches. Through a Regional Office — where two branches involved in a transaction will interact through a common RO.
What is the journal entry of branch expenses?
Goods received from head office, expenses incurred by the head office on behalf of the branch, cash received from head office, etc., will be credited. Cash sent to the head office will be debited. The balance in the account shows how much money is owing to the head office.
What accounting entries you need to pass in branch accounts?
The following are the journal entries of branch accounting. #1 – Inventory – If the head office transferred inventory of $1,000 to its branch office, then below journal entries will be passed in the head office books. #2 – Cash Remitted by Branch to Head Office – If the branch office remits cash of $500 to head office.
When a branch purchase a Fixed Assets What is debit?
| Q. | When a branch purchases fixed assets and the assets account is to be kept in the books of thehead office, the branch makes the following entry |
|---|---|
| B. | debits branch credits head office |
| C. | debits head office credits branch asset |
| D. | debit branch assets credit banks |
| Answer» a. debits head office credits bank |
How inter branch transactions are dealt in the accounting of independent branches?
Inter-Branch Transactions: When a Head Office has several Branches, transactions may take place among themselves and such transactions are known as inter-branch transactions. No branch need carry an account with any other Branch. Inter-branch transactions are treated as the transactions with the Head Office.
What is branch accounting types of branch?
Branches can be classified into two types.
- Dependent Branches. The term dependent branch means a branch that does not maintain its own set of books.
- Independent Branch. An independent branch means a branch, which maintains its own set of books.
What is branch accounting?
Branch accounting is a bookkeeping system in which separate accounts are kept for each branch or operating location of an organization. Technically, the branch account is a temporary or nominal ledger account, lasting for a designated accounting period.
Which item is not included in branch account?
Under Debtors System, credit sales, bad debts, return inward, discounts allowed and depreciation are not taken in the Branch Account. 7. Under Debtors System fixed assets is shown on the credit side only after deducting the amount of depreciation, if any.
How fixed assets are recorded?
Fixed assets are long-term assets that a company has purchased and is using for the production of its goods and services. Fixed assets are noncurrent assets, meaning the assets have a useful life of more than one year. Fixed assets include property, plant, and equipment (PP&E) and are recorded on the balance sheet.
Which accounting standard is applicable for accounting for fixed assets?
AS -10
AS -10 (Accounting for Fixed Assets) – Accounting Standards.
Which account is not prepared in branch accounting?
Credit sales, bad debts, discount allowed, returns from debtors to branch are not direct transactions from the head office and as such they are not recorded in the branch account.
What is Inter-branch Reconciliation?
Inter-branch reconciliation is a major activity for banks and financial institutions looking to create a balanced co-ordination between their various branches and their activities.
What are the journal entries of branch accounting?
The following are the journal entries of branch accounting. #1 – Inventory – If the Head office transferred inventory of $1000 to its branch office, then below journal entries will be passed in the books of Head office. #2 – Cash Remitted by Branch to Head office – If Branch office remit cash of $500 to Head office.
Who maintains the accounting entries of a branch?
Branch Maintaining Own Books: Accounting Entries by Head Office! Generally when branches are small their accounts are maintained by the head office.
How are accounting entries routed for inter-branch transactions?
For each combination of branches that may be involved in an inter-branch transaction, you can define the currency and the respective customer accounts to which the related accounting entries will be posted. The accounting entries for such inter-branch transactions can be routed in one of the following ways:
When do we use the branch accounting method?
The method is most often used when there are a small number of branch accounting entries in the books of the head office. The branch account itself is a temporary nominal ledger account.