PREPARATION OF BRANCH ACCOUNT

FINANCIAL ACCOUNTING SSS3 SECOND TERM              

WEEK 8 &9

PREPARATION OF BRANCH ACCOUNT

Contents

• Branch Adjustment Method
• Accounting Entries
• Formats and Illustration
• Where branches keep separate Accounts

Branch Adjustment Method of Branch Accounting

Unlike the memorandum or double column method, under this method, the profit loading will be taken to a separate A/C called “Branch adjustment A/C”. Under this method, the following are the main A/C that will be prepared:-

1. Branch stock A/C – at invoice price
2. Branch stock adjustment A/C showing profit loading
3. Goods sent to branch A/C – based on the cost price
4. Debtors A/C (where goods are sold or credited)
5. Branch P & L A/C

Accounting Entries

1. When goods are sent to the branch Dr. Branch stock A/C…