Question 1

Up to the trial balance, the accounting arrangements for a foreign branch are exactly the same as for any
A)Dependent branch
B)Independent branch
C)Both a and b
D)None of the above

Accepted Answer

B

Question 2

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

Accepted Answer

C

Question 3

Dependent branch makes :
A)Cash sales only
B)Credit sales only
C)Cash & Credit sales
D)Instalment sales

Accepted Answer

Dependent branches can make both cash and credit sales as they operate under the guidance and policies of the parent company, allowing them to engage in various types of transactions to cater to customer needs.

Question 4

Branch which donot maintain its own set of books is__________.
A)Dependent branch
B)Independent branch
C)Foreign branch
D)Local branch

Accepted Answer

Dependent branches do not maintain their own set of books; instead, all transactions are recorded and maintained by the head office. Independent branches, on the other hand, maintain their own set of books.

Question 5

An independent branch
A)Receives the goods from the head office
B)Purchases the goods from outside parties
C)Receives goods from both head office and outside parties
D)None of the above

Accepted Answer

An independent branch operates with a significant degree of autonomy and can receive goods from both the head office and outside parties, depending on its operational needs and the organizational structure.

Question 6

The Head office account in the books of branch is debited with
A)Cash sent to the head office and goods returned to the head office
B)Cash and goods received from the head office
C)Head office expenses allocated to branch by the head office
D)None of the above

Accepted Answer

The Head office account in the books of a branch is debited with cash sent to the head office and goods returned to the head office. This is because sending cash or returning goods to the head office represents an outflow of assets from the branch, which decreases the branch's liability to the head office.

Question 7

The adjustment entry for goods in transit is passed in the books of
A)Either the branch or the head office
B)Branch as well as Head office
C)Only Branch account.
D)Only Branch account

Accepted Answer

Goods in transit are typically recorded by the entity that has legal ownership of the goods at the time. This can be either the branch or the head office, depending on the terms of the shipment (e.g., FOB shipping point or FOB destination) and the specific agreement between the branch and head office.

Question 8

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.

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.

Question 9

In case of inter-branch transactions, each branch
A)Opens separate accounts for other branches
B)Passes no entry
C)May treat such transactions as the transactions with the Head office
D)All the above

Accepted Answer

Branches often treat inter-branch transactions as transactions with the Head Office to simplify accounting and maintain consistency across the organization.

Question 10

The Head Office Account maintained by the branch is of the nature of
A)Real Account
B)Personal Account
C)Nominal Account
D)None of the above

Accepted Answer

The Head Office Account maintained by a branch is of the nature of a Personal Account because it represents the account of the head office, which is considered as a separate entity from the branch for accounting purposes.

Question 11

Branches are divided into
A)Dependent
B)Independent
C)Foreign
D)All the above

Accepted Answer

Branches can be categorized into dependent, independent, and foreign branches, covering all the options provided. Dependent branches operate under the direct control of the head office, independent branches maintain their own set of books and operate with a degree of autonomy, and foreign branches are located in countries different from that of the head office, potentially operating under both dependent or independent models depending on the company's structure.

Question 12

Debtors system of keeping branch accounts are generally
A)Branch fairly small in size
B)Branch big in size
C)Branch with multiple transactions
D)All the above

Accepted Answer

The debtors system of keeping branch accounts is generally used for branches that are fairly small in size, as it simplifies the accounting process by treating all sales and transactions as if they were sales to an individual customer or debtor.

Question 13

Branches may be classified into ________.
A)Inland branches and foreign branches
B)Account branches and proper branch
C)Main branch and subordinate branch
D)None of these

Accepted Answer

Inland branches are located within the country of the head office, while foreign branches are located outside the country of the head office.

Question 14

Capital investments for the branches are made by
A)State office
B)Central office
C)Head office
D)None of these.

Accepted Answer

Capital investments for the branches are typically made by the Head office, as it is responsible for overseeing the overall operations and financial decisions of the organization.

Question 15

Branches not keeping full system of accounting is called________.
A)Independent branches
B)Partial branches
C)Dependent branches
D)None of these

Accepted Answer

The answer of Branches not keeping full system of accounting...

Question 16

It is a system of finding out the profit made by a head office at a branch by preparing an account called_______.
A)Profit &loss a/c
B)Trading a/c
C)Branch a/c
D)None of these.

Accepted Answer

The correct answer is C) Branch a/c. This account is specifically prepared to find out the profit made by a head office at a branch. It helps in understanding the financial performance of the branch in relation to the overall business.

Question 17

__________Account is prepared with a view to ascertain the gross profit of branch.
A)Branch account
B)Branch adjustment a/c
C)Branch expense a/c
D)None of these.

Accepted Answer

The answer of __________Account is prepared with a view to...

Question 18

Transaction between branches are called__________.
A)Inter? branch transactions
B)Branch transaction
C)Internal transaction
D)None of these.

Accepted Answer

Inter-branch transactions refer to the financial transactions that occur between different branches of the same company or bank.

Question 19

_________ represents goods sent by head office to the branch or by the branch to the head office but not received by other
A)Goods in transit
B)Cash in transit
C)Barter transit
D)None of these.

Accepted Answer

Goods in transit represent items that have been shipped by the head office to the branch or vice versa but have not yet been received by the other party. This term specifically refers to the movement of physical goods that are on their way but not yet delivered.

Question 20

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%

Accepted Answer

If the profit is 20% on the invoice price, it means the invoice price is 120% of the cost. Therefore, the profit on cost is (20/80)*100 = 25%.

Quiz 50: Accounting Arrangements and Operations for Branches

Up to the trial balance, the accounting arrangements for a foreign branch are exactly the same as for any

Under debtors system depreciation on fixed asset is__ _

Dependent branch makes :

Branch which donot maintain its own set of books is__________.

An independent branch

The Head office account in the books of branch is debited with

The adjustment entry for goods in transit is passed in the books of

For depreciation on fixed assets, whose accounts are maintained by the head office, the head office

In case of inter-branch transactions, each branch

The Head Office Account maintained by the branch is of the nature of

Branches are divided into

Debtors system of keeping branch accounts are generally

Branches may be classified into ________.

Capital investments for the branches are made by

Branches not keeping full system of accounting is called________.

It is a system of finding out the profit made by a head office at a branch by preparing an account called_______.

__________Account is prepared with a view to ascertain the gross profit of branch.

Transaction between branches are called__________.

_________ represents goods sent by head office to the branch or by the branch to the head office but not received by other

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