Question

Explain how Branch Stock Account helps in keeping effective control over the branch stock.

Answer 1

Branch Stock account is an account made to record transaction relating to stock like stock sent, returned, pilfered, sold, unsold etc. The debit side shows expenses and credit side shows gains from stock. Branch stock can be controlled with the help of this account as this reveals goods sent, goods returned, loading on opening stock, stock lost in transit, pilferage of stock, shortage of stock etc. The account also reveals profit or loss made and any abnormal rise or fall in stock is known. Thus, the level and utilization of stock at a particular branch can be effectively controlled with the help of branch stock account.