BRANCH ACCOUNTS

A/c entries 2363 views 2 replies

Kumar Gaurav

Going...to be C.A soon...

1624 Points Joined June 2007

HI ALL,

I m accountant in a firm and our firm has two branches.branches has no seperate accounts so, i m maintaining branch accounts in HO books. And HO trf. the goods to branches on MRP basis. And i want to know that how to show trf. entry of goods to branch in ho books.

Branch a/c dr.

Goods sent to branch a/c cr.

but this is on MRP basis so, how to show it in Tally Also.

Thanks in Advance

plz help

Replies (2)

Late CA Sampat Jain

Chartered Accountant

4772 Points Joined March 2007

Profit is earned when sales are made and not when goods are sent to branch . However for control or other purposes manangement may decide to send goods to branch at invoice price . In this situation , closing stock at branch will be at sales price , on which no profit has been earned . Therefore , an entry in HO is to be passed for creation of stock reserve , for the amount of profit loaded on the closing stock so that the profit and loss account does not reflect the profit on such stock.

ca rahul

professional

58 Points Joined August 2007

stock transfer to branches should be on cost basis. bcz profit is not on branch transfer but if you are doing branch transfer at mrp basis than as on last day of financial year .you should make stock reserve on closing stock on the closing stock held at the end of f.y.