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JAMB Principles of Accounts 2010 Question 37

Question 37

Branch Accounts

The branch expenses paid by the head office is recorded in the books by debiting branch

  1. A.bad debt account and crediting branch debtors' account
  2. B.expenses account and crediting bank account
  3. C.profit and loss account and crediting branch stock account
  4. D.discount allowed account and crediting branch debtors' account.
Show the answer and explanation

Answer: B (expenses account and crediting bank account)

Explanation

The branch expenses account is debited and the bank (which paid) is credited.