Question

Goods returned by branch debtors direct to head Office (Selling Price) ?

What will be the effect in the branch stock account and branch stock adjustment acc?​

Answer 1

Answer:

•In the books of the Head Office, Branch Account is debited with the goods supplied and all expenses met by Head Office and credited with all remittances and returns, similar to Customers Account. Therefore, the system can be called Debtors System or One Account System.

•Branch Stock Adjustment Account is prepared at Invoice Price. The difference between the two sides of this account reveals either gross profits (if credit side to greater than the debit side) or gross loss (if debit side is greater than the credit side).

Explanation:

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Warm regards:Miss Chikchiki