Final Accounts System

The profit or loss of a dependent branch can also be worked out by preparing a Memorandum Branch Trading and Profit & Loss Account. This account is prepared on the basis of cost of goods sent to the branch (not the invoice price). 

Apart from the Branch Trading and- Profit & Loss Account, the Head Office also maintains the Branch Account. But, under this system, the Branch Account is in the nature of a personal account which shows only the mutual transactions between the head office and the branch. The balance of Branch Account, therefore, represents the net assets of the branch.

Post a Comment

Previous Post Next Post