Accounting Entry

Sir,One of our creditor debit/return goods raised by Branch account.and what will be contra entry in Head office and branch account?
Replies (5)
Quick Summary
This discussion clarifies the accounting entries required when a creditor returns goods, affecting both the Head Office (HO) and Branch accounts. It explains how to reverse the original entry and provides specific examples for various transactions, including goods sent to the branch, goods returned by the branch, remittances, and sales (both cash and credit). The advice also touches upon the tax implications and legalities of such transactions, particularly when sales are recognised at the HO level but the branch handles the debit note.

Who is the creditor? Head office?

Reverse the original entry.

Accounting Entries in the books of Head Office (H.O.):

1.
For Cost Price of Goods sent to Branch:
Branch Stock A/c Dr

To Goods Sent to Branch A/c

2.
For Cost Price of Goods returned by Branch:
Goods Sent to Branch A/c Dr

To Branch Stock A/c
3.
For remittance to Branch for expenses:
Branch Cash A/c Dr To Bank A/c
XXX
XXX
4.
For cash sales at Branch:
Bank A/c [(or) branch cash, if money is not immediately remitted] Dr
To Branch Stock A/c
XXX
XXX
5.
For credit sales at Branch:
Branch Debtors A/c Dr

To Branch Stock A/c

6.
For Goods returned to Branch by customers:
Branch Stock A/c Dr

To Branch Debtors A/c

7.
For Cash collected from Branch Debtors:
Bank A/c [(or) branch cash, if money is not immediately remitted] Dr
To Branch Debtors A/c

https://castudyweb.com/wp-content/uploads/2019/05/Branch_Accounts_Theory_and_Problems.pdf

Sir,same creditor otta clothing Ltd maintain in HO Hosur,and branch at Tumkur..Books of accounts different local tax and igst there..due to certain issues returned goods less )debit note raised for behalf on of HO from branch ...

If the HO had recognised sales in HO and wanted branch to deal with debit note to save taxes, I think the law will prohibit such transactions. 

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