Easy Office
LCI Learning

Branch accounting

This query is : Resolved 

Avatar

Querist : Anonymous

Profile Image
Querist : Anonymous (Querist)
09 January 2017 Hi,
I have a trading company with 5 branches in Delhi and one head office. All the sales receipts in these branches are either in cash or credit card. All the sales receipts are then remitted to the head office. We use Tally ERP 9 as the accounting software. usually the sales receipts are remitted to the head office on a daily basis. I would like to know a suitable way to account for the remittances in the books of the branch as well as in the books of the head office.
It would be great if you could suggest me a suitable accounting entry, so that the books reflect a correct picture of the accounts. Please ignore stock transfers.

Thanks!

Avatar

Expert : Anonymous

Profile Image
Expert : Anonymous (Expert)
09 January 2017 Sir my questions is do you have separate bank account for each branch or you have a single bank account for all the branck

Avatar

Expert : Anonymous

Profile Image
Expert : Anonymous (Expert)
09 January 2017 sorry branch




10 January 2017 In the books of HO
01. On receipt of cash/credit card credits from branch....
debit cash / bank as the case may be
credit the concerned branch
02. On sending the goods to branch
debit the concerned branch
credit goods sent to branch

In the books of branch
1. On sending cash/credit card to HO
Debit HO
Credit Cash/credit card
2. On receiving goods from HO
Debit Goods received from HO
Credit HO

Avatar

Querist : Anonymous

Profile Image
Querist : Anonymous (Querist)
10 January 2017 Hi,
Thanks for your reply!
These entries in the branch books would give a debit balance in the head office account. would that be okay? Shouldn't the head office account have a credit balance in the branch books as the branch is liable to pay all the sales receipts to the head office? I am quite confused about this. It would be great if you could elaborate and also explain the potential impact on the balance sheet in books of head office.
Many thanks!

10 January 2017 I think you take some figures and then we can discuss
Assuming HO sends goods worth 100 to branch. These goods are to be sold for 110. (10% being mark up)

01. On receiving goods from HO
Debit Goods received from HO 100
Credit HO 100
02. On selling goods received from HO
Debit cash/credit cards 110
Credit Goods received from HO 110
03.On remitting sales receipts to HO
Debit HO 110
Credit Cash/Credit cards


Avatar

Querist : Anonymous

Profile Image
Querist : Anonymous (Querist)
18 January 2017 okay now I understand. Thank you!

18 January 2017 You are most welcome.






You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

CAclubindia's WhatsApp Groups Link


Similar Resolved Queries


loading


Unanswered Queries