The branch expenses paid by the head office is recorded in the books by debiting branch?

A. bad debt account and crediting branch debtor’s account
B. expenses account and crediting bank account
C. profit and loss account and crediting branch stock account
D. discount allowed account and crediting branch debtors’ account

Correct Answer:

Option B – expenses account and crediting bank account

Explanation

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

• Goods sent to branch
• Expenses of the branch paid by the head office
• Profit of the branch

From the above explanation, we would debit expenses account and crediting the bank account