In the head office ledger; the value of goods sent to the branch are ________?

A. debited to the head office current account
B. debited to the branch current account
C. credited to the head office current account
D. credited to the branch current account

Correct Answer:

Option B – debited to the branch current account

Explanation

Goods sent to the branch is recorded at the debit side of the branch stock account. Goods returned to head office and closing stock is shown at the credit side of this account. The excess of debit over credit is shortage. The excess of credit over debit is surplus.