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JAMB Principles of Accounts 2010 Question 38

Question 38

Branch Accounts

Goods returned to branch by branch customers is recorded in the head office books by debiting

  1. A.bank account and crediting branch stock account
  2. B.goods sent to branch account and crediting branch debtors' account
  3. C.branch stock account and crediting branch debtors' account
  4. D.branch debtors' account and crediting cash account.
Show the answer and explanation

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

Explanation

The goods return to branch stock (debit) and branch debtors owe less (credit).