Question

33) Closing balance in goods sent to branch account is transferred to
a) Purchases A/c or Trading A/cb) Total Debtors Alc
c) Total Creditors A/cd) Branch Expenses Alc
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Answer 1

Closing balance in goods sent to branch account is transferred to

a) Purchases A/c or Trading A/c b) Total Debtors Alc

c) Total Creditors A/cd) Branch Expenses Alc

The correct answer is :

a) Purchases A/c or Trading A/c

Explanation :

Closing balance in goods sent to branch account is transferred to Purchases A/c or Trading A/c.

Any cash purchases are recorded in the cash book and credit purchases are recorded in the purchases book. Thus cash and credit purchases are recorded in the purchase and trading ledger. All types of purchases i.e. cash purchases and credit purchases are shown as purchases in the trading account. That's why the Closing balance in goods sent to the branch account is transferred to Purchases A/c or Trading A/c.

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Answer 2

Closing balance in goods sent to branch account is transferred to

a) Purchases A/c or Trading A/c

b) Total Debtors Alc

c) Total Creditors A/c

d) Branch Expenses Alc

Answer:

a) Purchases A/c or Trading A/c

Explanation :

• The closing balance in the branch account for products received is transferred to the trading or purchases account.
• Any purchases made with cash are noted in the cash book, while those made with credit are noted in the purchases book.
• In the buy and trading ledger, credit and cash purchases are accordingly recorded.
• All transactions, both those made with cash and those made with credit, are reflected as purchases in the trading account.
• Because of this, the products shipped to the branch account's closing balance are moved to the Purchases A/C or Trading A/C.

Not chosen:

• According to the consolidated financial accounts, the term "total debtors" refers to the sum of all trade receivables owed to the consolidated firms.
• An organization, business, or individual who has given debtor products, services, or a financial loan is a creditor. Once a creditor has granted a loan, the repayment is normally due at a later, predetermined date.
• Accordingly, a Branch Account is set up in the records of the head office, to which the cost of the products or services given or the amount of the costs paid are debited and, in turn, the value of the benefits and the cash received from the branch is credited. The Indian Institute of Chartered Accountants

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