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

A. Debited to the branch current account
B. Debited to the head office current account
C. Credited to the head office current account
D. Credited to the branch current account

Correct Answer:

Option B – Debited to the head office current account

Explanation

Branch’s current account is maintained in the head office books to record all transactions between the head office and the branch. This account is debited with the following:

i. Goods sent to branch

ii. Expenses of the branch paid by the head office

iii. Profit of the branch