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JAMB Principles of Accounts 2010 Question 36

Question 36

Branch Accounts

If goods were returned to branch by the customers, the correct posting for this transaction is to debit

  1. A.branch debtor's account and credit head office account
  2. B.head office account and credit branch stock account
  3. C.branch stock account and credit branch debtors' account
  4. D.branch cash account and credit branch stock account.
Show the answer and explanation

Answer: C (branch stock account and credit branch debtors' account)

Explanation

The goods come back into branch stock (debit) and the customers owe less (credit branch debtors).