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Doubt regarding accounting entry
Is it correct to capitalize assets in the books of H.O. if purchase by branch & consideration is also paid by branch
Replies (4)
Yes HO can go ahead even though consideration has been paid by br.
but what would be accounting entry if payment made by H.O.
actually during Audit I observed an accounting entry where consideration paid by H.O for assets purchased but bill was in the name of branch .Accounting entry passed by H.O. is Fixed assets A/c Dr. To Bank A/c i.e.instead of passing the entry Branch A/c Dr. to Bank the H.O. is passing the aforesaid mention entry, is it correct or not .Should we force the Mgt. to change the entry or Not .Please provide your valuable sugestion.
Passing entry @ HOlevel suggests centralised processing.
Branch is merely a conduit.
I think the entry passed by HO is just fine. If the management wants it can always show fixed assets at HO level instead of showing them at branch levels separately.
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