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JAMB Principles of Accounts 2012 Question 35

Question 35

Branch Accounts

In the head office ledger, the value of goods sent to the branch are

  1. A.debited to the head office current account
  2. B.debited to the branch current account
  3. C.credited to the head office current account
  4. D.credited to the branch current account.
Show the answer and explanation

Answer: B (debited to the branch current account)

Explanation

In its own books head office keeps a branch current account and debits it with goods sent, because the branch now owes for them.