For depreciation on fixed assets, whose accounts are maintained by the head office, the head office
A)Debit Fixed assets account and credit Branch account
B)Debit Branch account and credit Fixed assets account
C)Debit Branch account only
D)Credit fixed assets.

Question

Quizplus · Accepted Answer

The correct accounting treatment for depreciation on fixed assets, whose accounts are maintained by the head office but relate to a branch, involves debiting the Branch account and crediting the Fixed Assets account. This reflects the expense (depreciation) being allocated to the branch while reducing the book value of the fixed asset in the head office's accounts.

For Depreciation on Fixed Assets, Whose Accounts Are Maintained by the Head