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WAEC Financial Accounting 2012 Question 16

Question 16

Branch Accounts

Branch Stock Account is used to determine the

  1. A.net value of goods sent to branch.
  2. B.gross profit of the branch.
  3. C.branch credit sales.
  4. D.branch net profit or loss.
Show the answer and explanation

Answer: B (gross profit of the branch.)

Explanation

When the branch stock account is kept like a trading account, the balancing figure on it is the branch's gross profit.