Question

Objectives of branch accounting with headings.

Answer 1

Branch account:

 

A branch is a small part of the business that has some amount of independence to control its operation. A branch account is an aggregate of transactions in the books of organization with different branches.

 

OBJECTIVES OF BRANCH ACCOUNTS:

(1) To understand the profit or loss of each branch.
(2) To understand the financial status of each branch.
(3) To control the operations of each branch.
(4) To identify requirement of cash or goods for each branch.
(5) To bring ideas to enhance the operation of different branches.
(6) To make comparison of performance between different branches.
(7) To meet the statutory requirements