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!
Expert :
Anonymous
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
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
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