You must complete Capital Market and Loan Capital to unlock this Lesson.

Preparation of Branch Account

ILLUSTRATION:

1. BRANCH ADJUSTMENT METHOD

Under this system, the profit loading will be taken to a separate account called “Branch Adjustment Account”. The following will be prepared:

  • Branch stock account.
  • Branch Adjustment account.
  • Goods sent to branch.
  • Debtors Account.

FORMAT:

BRANCH STOCK ACCOUNT (INVOICED PRICE)

GOODS SENT TO BRANCH ACCOUNT (COST PRICE)     

BRANCH ADJUSTMENT ACCOUNT

PROFIT AND LOSS ACCOUNT 

ILLUSTRATION 1

SAM Enterprise is a retail business concern with head office at Lagos and office at Ibadan. The head office makes all purchases and charges out goods to the branches at cost plus 25% which represents the selling price to the branch. The branch limit to the head office all cash received from customers. The following transaction took place at the branch during the year ended 31st December, 2013

The valued of the stock at selling price at the branch on 31st December was N6, 380.00

You are required to prepare in the head office books the following accounts.

Lesson tags: Financial Accounting Lesson Notes, Financial Accounting Objective Questions, SS2 Financial Accounting, SS2 Financial Accounting Evaluation Questions, SS2 Financial Accounting Evaluation Questions Third Term, SS2 Financial Accounting Objective Questions, SS2 Financial Accounting Objective Questions Third Term, SS2 Financial Accounting Third Term
Back to: Financial Accounting – SS2 > Third Term
© [2022] Spidaworks Digital - All rights reserved.
error: Alert: Content is protected !!