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WAEC Financial Accounting 2016 Question 38

Question 38

Branch Accounts

The entries for credit sales at branch where the Head office keeps all records are: Debit

  1. A.Branch Stock Account; Credit Branch Debtors Account.
  2. B.Branch Debtors Account; Credit Branch Stock Account.
  3. C.Branch Debtors Account; Credit Branch Adjustment Account.
  4. D.Branch Adjustment Account; Credit Branch Debtors Account.
Show the answer and explanation

Answer: B (Branch Debtors Account; Credit Branch Stock Account.)

Explanation

Branch customers owe money (debit branch debtors) and goods leave branch stock (credit branch stock).