To account for expenses paid by head office on behalf of the branch, the branch...
FINANCIAL
JAMB 2018
To account for expenses paid by head office on behalf of the branch, the branch should___________
- A. Debit profit and loss account and credit head office account
- B. Debit head office account and credit cash
- C. Credit cash and debit profit and loss account
- D. Credit profit and loss account and debit head office account
Correct Answer: A. Debit profit and loss account and credit head office account
Explanation
The head office maintains a book, (branch account) more or less like other personal accounts, so that any expenses incurred on behalf of the branch will also be debited to the branch account. Similarly, in the branch books, there will be head office accounts
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