Difference between dependent and independent branch accounting
Answers
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Concept Introduction:-
A sentence which has a subject, verb, object, and modifiers.
Explanation:-
A question has been provided to us
We need to find the solution to the question
Definition
The branch receiving goods from H.O and selling them according to instructions of it is dependent branch. The branch receiving goods from H.O and authorised to purchase them independently is independent branch.
METHOD OF BUYING
It cannot buy the goods from market. It can buy the goods from market.
METHOD OF SELLING
It is to follow theinstructions of H.O tosell the goods. i.e. oncash or on cash andcredit both.It can sell goods oncash or credit basis asthe market conditionprevails.
POWERS TO INCUREXPENSES
H.O sends cash to thebranch to pay itsexpenses.It has its own cashbalance to pay itsexpenses.
REMITTING CASH TOH.O
It has to remit cash daily to H.O received from cash sales or collection from debtors. It is not compulsory to remit cash daily cash can be sent to H.Oaccording to the convenience.
BOOKS OFACCOUNTS
It keeps cash book, petty sales book, cash book, stock register etc. It prepares its own trial balance and final accounts.
REPORTS AND OTHER DATA
It sends reports of sales, cash, stock, expenses, etc. to H.Oregularly.It has to send only the trial balance and final accounts at the end of the year.
FINDING PROFIT ORLOSS
The profit is found out by preparing branch trading and profit and loss A/c. The profit and loss is found out by the branch and remitted toH.O at the end of the year.
BALANCE SHEET
It does not prepare its balance sheet. A combined B/S of branch and H.O is prepared by the branch.
Final Answer:-
The correct answer is the difference between dependent and independent branch accounting.
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