If goods were returned to branch by the customers; the correct posting for this transaction is to debit?

A. branch debtor’s account and credit head office account
B. head office account and credit branch stock account
C. branch stock account and credit branch debtors’ account
D. branch cash account and credit branch stock account

Correct Answer:

Option C – branch stock account and credit branch debtors’ account

Explanation

Debit branch stock account (stock have increased by what was returned) and credit branch debtors’ account