Deck 3: Accounting and Financial Management for Branches and Head Offices

Question 1

Which of the following is not the main objective of accounting?

A)systematic recording of transactions
B)ascertaining profit or loss
C)ascertainment of financial position
D)solving tax disputes with tax authorities

Answer 1

solving tax disputes with tax authorities

Question 2

Matching concept means

A)assets = capital + liabilities
B)transactions recorded at accrual concept
C)anticipate no profit but recognize all losses
D)expenses should be matched with the revenue of the period. branch accounts

Answer 2

expenses should be matched with the revenue of the period. branch accounts

Question 3

When Branch pays expenses for H.O. the following account is debited in the books of the branch _______

A)expenses is debited
B)h.o. a/c is debited
C)branch is debited
D)none

Answer 3

h.o. a/c is debited

Question 4

Under the stock and debtor system, Branch A/c is treated as ______

A)joint a/c
B)nominal a/c
C)personal a/c
D)real a/c

Question 5

Goods are sent to branch at cost plus 20%. If closing stock of the branch is Rs 60,000 at invoice price, Rs ______ will be credited to stock reserve a/c.

A)rs 10000
B)rs 12000
C)rs 6000
D)rs 12600

Question 6

HO sends goods to branch at 20% profit on invoice price, therefore the percentage of profit on cost comes to ______

A)15%
B)25%
C)33.33%
D)20%

Question 7

HO sends goods to branch at invoice price after adding 25% on cost price, so profit would be ___ % of invoice price

A)33.33%
B)40%
C)20%
D)25%

Question 8

For finding the amount of sundry expenses paid by the branch, the following a/c should be prepared.

A)computer a/c
B)creditors
C)petty cash a/c
D)debtors

Question 9

If the opening balance of petty cash is Rs 1000, closing balance is Rs 500 and the petty cash received from HO is Rs 700, then what will be the amount of sundry expenses _____

A)rs 1200
B)rs 800
C)rs 700
D)rs 500

Question 10

H.O. sent Rs 5000 as petty cash to branch during the year. Opening and closing balances of petty cash was Rs 1400 and Rs 400 respectively. Then petty expenses of the branch during the year will be ______

A)rs 5000
B)rs 6400
C)rs 4600
D)rs 6000

Question 11

Which of the following branches, taking into consideration the scope of authority and responsibility, prepares its own independent final accounts?

A)independent branch
B)foreign branch
C)dependent branch
D)independent and foreign branch both

Question 12

Opening balance of debtors a/c is Rs 1,40,000. Credit sales is Rs 10,74,000 and closing balance of Debtors a/c is Rs 1,90,000. What is the amount of cash collection from the debtors?

A)rs 10,24,000
B)rs 8,84,000
C)rs 11, 52,000
D)rs 8,42,000

Question 13

Goods in transit are shown in the balance sheet at ______

A)head office
B)branch
C)both
D)none of above

Question 14

H.O. has sent goods on invoice price worth Rs 2,40,000 which are 25% above cost price. What is the loading element?

A)rs 60000
B)rs 240000
C)rs 48000
D)rs 160000

Question 15

The adjusting entry for difference between the invoice price and cost price of goods are shown in ________

A)balance sheet
B)p & l a/c
C)branch adjustment a/c
D)none of above

Question 16

Stock and debtors system is generally used when goods are sent to the branch at _____

A)cost price
B)invoice price
C)both
D)none

Question 17

H.O. sent goods to branch at invoice price 50% plus on original price. How many percentage of profit will be on Invoice price?

A)20%
B)25%
C)33.33%
D)16.67%

Question 18

Goods sent by HO but not received by branch before the end of the year, by debiting it to goods in transit, which account should be credited?

A)cash a/c
B)h.o. a/c
C)trading a/c
D)branch a/c

Question 19

If the opening balance of debtors is Rs 16,000 and closing balance is Rs 80,000, cash received from debtors is Rs 35,000 and bad debts is Rs 1,000, then what will be the amount of credit sales?

A)rs 95000
B)rs 105000
C)rs 100000
D)rs 110000

Question 20

The system of keeping accounts generally adopted by small size branches are:

A)debtors system
B)stock & debtors system
C)wholesale branch system
D)final account system

Question 21

Goods are supplied by the head office to dependent branches are at:

A)cost price
B)invoice price
C)market price
D)cost or invoice price

Question 22

Under debtors system which account is prepared by head office to calculate profit or loss of each branch:

A)capital account
B)debtors account
C)branch account
D)branch adjustment account

Question 23

Under debtors system depreciation on fixed asset is ________

A)credited to branch a/c
B)debited to branch a/c
C)not shown in branch a/c
D)shown in debtors a/c