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Accounting for Branches Quiz

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Questions and Answers

What is the accounting treatment for dependent branches?

Stock and Debtors Method
Goods invoiced at cost or selling price (correct)
Debtors Method
Goods invoiced at wholesale price

Which method is used for charging goods to branches when goods are sent at wholesale price?

Stock and Debtors Method
Trading and profit and loss account method (correct)
Debtors Method
Goods invoiced at cost or selling price

What is the reconciliation statement prepared for in branch and head office transactions?

Incorporating branch balances in head office books
Charging goods to branches
Finding reasons for disagreement (correct)
Understanding concept of branches

What do independent branches maintain?

Whole accounting records are kept at Head Office (C) Signup and view all the answers

What do foreign dependent branches use for maintaining accounts?

Goods invoiced at cost or selling price (C) Signup and view all the answers

What are the different learning outcomes after studying accounting for branches, including foreign branches?

The learning outcomes include understanding the concept of branches and their classification from an accounting point of view, distinguishing between the accounting treatment of dependent and independent branches, learning various methods of charging goods to branches, preparing reconciliation statements of branch and head office transactions, and differentiating between integral and non-integral foreign branches. Signup and view all the answers

What are the methods used for maintaining accounts of dependent branches?

The methods include goods invoiced at cost or selling price, debtors method, stock and debtors method, goods invoiced at wholesale price, trading and profit and loss account method, and whole sale branches method. Signup and view all the answers

What is the classification of inland branches in accounting for branches, including foreign branches?

Inland branches are classified into independent branches which maintain independent accounting records, and dependent branches for which whole accounting records are kept at the head office. Signup and view all the answers

What is the technique used for foreign currency translation in the case of foreign branches?

The technique used is to differentiate between integral and non-integral foreign branches. Signup and view all the answers

What is the purpose of the trading and profit and loss account method in accounting for branches, including foreign branches?

The purpose is to incorporate branch balances in the head office books. Signup and view all the answers