Outrageous Branch Profit And Loss Account

Manufacturers may sell goods to the consumers either through the wholesalers and approved stockiest or through their branches.

Branch profit and loss account. This account is nominal account in nature and is prepared to calculate profit and loss for each branch. If credit side is greater than the debit side there will be net profit. Branch Accounting is the system of the bookkeeping under which the company maintains separate accounts for each of the operating locations or branches of the company and it is followed with the motive of increasing the transparency and knowing the cash flow position and the financial picture of each such location of working of the company.

And every transaction that is made in between the head office and its branches is. Invests funds to set up and run the branches. To decide whether a particular branch is earning profits and should be continued.

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. It should be carefully noted that allexpenses whether paid by the head office or by the branch are debited to the 92. Branch Trading Account is debited by crediting Opening Stock.

As stated earlier under debtors system the head office simply opens a Branch Account for each branch in which it records all transactions relating to the branch. The goods supplied by the head office to the branch may be either at cost. Branch Profit and Loss Account exhibits the net result of the operations ie net profit or net loss.

A profit and loss statement PL or income statement or statement of operations is a financial report that provides a summary of a companys revenues expenses and profitslosses over a given period of time. The closing stock sales goods returned by branch is credited to the trading account. Branch Account - Format Concept - Financial Accounting - By Saheb Academy.

Branch accounting provides better accountability and control since. Branch account is debited with opening balance of branch assets. The basic purpose of branch accounting is to ascertain the branch income branch expenses branch assets and branch liabilities.