How is cash received from debtor in branch accounting?
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Under this, a Branch Account is opened for each branch in the head office ledger. All transactions are recorded in this account. The Branch Account is prepared in such a way that it discloses the profit or loss of the branch. Branch Account is a Nominal Account in nature. Head office may send goods to branch either at “Cost price” or “Selling price”
Journal Entries Under Debtor Method
For recording opening balances of Branch Assets Branch A/c Dr. To Branch Assets (Individually)For recording opening balances of Branch Liabilities Branch Liabilities (Individual) Dr. To Branch A/cWhen goods are supplied by the Head Office/another branch to branch Branch A/c Dr. To Goods sent to Branch A/cWhen goods are returned by the branch/branch customers directly to the Head Office Goods Sent to Branch A/c Dr. To Branch A/cWhen goods are supplied by the branch to another branch under instructions of Head Office Goods Sent to Branch A/c Dr. To Branch A/c
Journal Entries Under Debtor Method
For recording opening balances of Branch Assets Branch A/c Dr. To Branch Assets (Individually)For recording opening balances of Branch Liabilities Branch Liabilities (Individual) Dr. To Branch A/cWhen goods are supplied by the Head Office/another branch to branch Branch A/c Dr. To Goods sent to Branch A/cWhen goods are returned by the branch/branch customers directly to the Head Office Goods Sent to Branch A/c Dr. To Branch A/cWhen goods are supplied by the branch to another branch under instructions of Head Office Goods Sent to Branch A/c Dr. To Branch A/c
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