What are the need for branch accounting?

The need arises for branch accounting as to ascertain the profitability of each branch separately for a particular accounting period,to ascertain whether the branch should be expanded or closed,to ascertain the requirement of cash and stock for each branch and to ascertain the quantity of stock held by each branch at …

What is branch accounting types of branch?

As all collections are directly remitted to Head Office, naturally, expenses of branches are met by Head Office. In other words, these branches are operated and controlled by Head Office. Dependent Branch: Dependent branches are those which do not maintain separate books of account and wholly depend on Head Office.

What is dependent branch in accounting?

Dependent Branch: A branch which is dependent upon Head Office mainly for “Goods and Cash”. Books of accounts relating to such branch also will be maintained by Head Office. Features of Dependent Branch: Branch receives goods from Head Office. Branch normally makes cash sales.

What is the journal entry when goods are sent to branch?

Goods sent to branch is also recorded at the debit side of this account. Goods returned to head office and closing stock is shown at the credit side of this account. The excess of debit over credit is shortage. The excess of credit over debit is surplus.

How many types of branches are there in branch accounting?

Under dependent branch, two types of branches are included, which is termed as service branch and retail branch. * Service Branch: All the branches which are booking or executing orders on behalf of head office are called service branches.

Is Branch a dependent?

Dependent Branch: A branch which is dependent upon Head Office mainly for “Goods and Cash”. Books of accounts relating to such branch also will be maintained by Head Office. Features of Dependent Branch: Branch receives goods from Head Office.

What is branch accounting in one word?

Branch accounting is a bookkeeping system in which separate accounts are maintained for each branch or operating location of an organization. However, branch accounting usually refers to branches keeping their own books and later sending them into the head office to be combined with those of other units.

When goods are sent to branch which account is debited?

Under this system, Trading and profit and loss account is prepared to calculate the gross profit or gross loss and net profit or net loss. The opening stock and goods sent to branch is debited in the trading account. The closing stock, sales, goods returned by branch is credited to the trading account.

What is the 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 are the features of independent branch?

Characteristics of an Independent Branch:

• Such Branch gets goods from Head Office and from outside parties.
• It prepares its own Trial Balance, Trading and Profit, and Loss Account and Balance Sheet.
• There may be inter-branch transactions.
• A combined Balance Sheet of branch and H.O is prepared by the branch.

  What do you mean dependent branch?

  What is difference between dependent and independent branch?

  2 answers. A dependent branch does not maintain, its own set of books. Independent Branch. When the size of the branches is very large, their functions become complex.

  What are the types of branch?

  How many types of branch are?