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JAMB Principles of Accounts 2000 Question 49

Question 49

Branch Accounts

A major benefit derived from the reconciliation of branch and head office books is to

  1. A.determine accurate returns by the branch
  2. B.ascertain the correct profit or loss on branch activities
  3. C.enable the branch to keep control over stock
  4. D.enable the branch to ascertain debtors' balance.
Show the answer and explanation

Answer: B (ascertain the correct profit or loss on branch activities)

Explanation

Reconciling the current accounts removes differences so the true profit or loss of the branch can be found.