Professional Documents
Culture Documents
Bilal Yasir
M.Rahat Javaid
Razi-ud-din
Zuhaib Farooq
Asad Sattar
Ateeq Taj
Noree n Malik
Uswah Tahir
Ayesha Tahir
Branch Accounting
Branch Accounting
In tro d u ctio n
A s a b u sin e ss flo u rish e s , it
b e co m e s n e ce ssa ry to o p e n u p
b ra n ch e s in v a rio u s o th e r
to w n s a n d citie s in o rd e r to
m a rk e t its se rv ice s / p ro d u cts
w h ich re su lts in th e in cre a se
o f its p ro fits .
“ A b ra n ch is g e n e ra lly d e fin e d
a s a se ctio n o f a n e n te rp rise
th a t is g e o g ra p h ica lly
se p a ra te d fro m th e re st o f th e
b u sin e ss . ”
T h e a ctiv itie s o f th e b ra n ch
a re co n tro lle d b y a h e a d o ffice
a n d u su a lly it ca rrie s o n th e
sa m e fu n ctio n s a s o f
e n te rp rise s . F o r e x a m p le
Branch Accounting
vBranch is not a separate legal
entity; it is simply a segment of
business.
Goods transferred
Wholesale price
From Head office at cost
Goods transferred
From head office at loaded (invoice) price
Accounting arrangement
of Retail Dependent
Branches
vThe Accounting arrangement of
a branch depends upon its size,
the type of activities, the
method of operation and
degree of control to be
exercised by head office.
vThe Main methods of accounting
for branch transaction are:
1.Debtors System
2.Stock and Debtor system
Accounting arrangement
of Retail Dependent
Branches
vDebtor system
vThis system of accounting is suitable
for the small size branches. Under
this a branch account is opened for
each branch in the head office ledger.
vHead office may send goods to branch
at either at cost price or selling price.
1.Cost price method
2.Selling price method (Invoice
price)
Accounting arrangement
of Retail Dependent
Branches
1.Cost price method:
• Under this method at the beginning of the year branch
account is debited with the opening balance of assets
such as stock (at cost), debtors, petty cash, furniture,
prepaid expenses, accrued income, lying with the
branch.
• Similarly, it is credited with the opening balances of
liabilities of the branch such as creditors, outstanding
salaries, rent.
Branch Account Dr.
Journal
Branch
Branch Assets Account (Individual)
entry:
Liabilities Account (Individual) Dr.
Branch Account
Accounting arrangement
of Retail Dependent
Branches
In the books of Head office
Branch Account
Date Particulars Rs Date Particulars
Rs
• Journal Entries
• Journal Entries
• Journal Entries
D e c . 3 1 G o o d s s e n t to b ra n ch A / c Dec . 31 Bank A / c
B a n k A /c Cash sales
R e n t, R a te s & Ta x e s Collection from debts
Balance c / d
P e tty C a s h re m itta n ce at branch
In transit
Stock and Debtor
System
B. Branch Debtors Account
When branch is allowed to sell goods on credit. It is
used to exercise control over branch debtors. It is
prepared like sundry debtors account.
Date Particulars Rs Date Particulars
Rs
Jan. 1 Branch b/d Jan.1 Balance b/d
Jan . 1 Balance b / d
__ Balance c / d __
__
Stock and Debtor
System
C. Goods sent to Branch Account
Goods sent to branch account is credited with the
invoice price of goods sent to the branch by the head
office and transferred from other branches and
debited with the invoice price of the goods
Date Particulars Rs Date Particulars
returned/transferred by the branch. Rs
Jan. 1 Branch b/d Jan.1