BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Profit and loss
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Profit and loss of each department
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Profit and loss of head office
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Profit and loss of manufacturing companies
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Detailed explanation-1: -Branch accounting is a useful tool and an important aspect of managing a business. Using branch accounting helps to improve transparency and financial performance of a company. It aids in understanding the profit and loss produced by the branches.
Detailed explanation-2: -Branch Profit and Loss Account: This account is credited with the amount of gross profit which is transferred from Branch Adjustment Account, Cost of surplus of stock or any revenue income and this account is debited with all branch expenses, depreciation, cost of abnormal loss of stock, etc.
Detailed explanation-3: -Debtor System of accounting is suitable for the small-size branches. Under this, a Branch Account is opened for each branch in the head office ledger. All transactions are recorded in this account. The Branch Account is prepared in such a way that it discloses the profit or loss of the branch.