The entries for credit sales at a branch where the head office keeps all records are: Debit?

A. Branch stock account; credit branch debtors account
B. Branch debtors account; credit branch stock account
C. Branch debtors account; credit branch adjustment account
D. Branch adjustment account; credit branch debtors account

Correct Answer: Option B

B. Branch debtors account; credit branch stock account

Explanation

The accounting entry for credit sales at the branch would be to debit branch debtors accounts and credit stock account. To understand this better, remember we debit all receipts whether cash or stock (money or goods that come into the business) and credit all payments (money or goods that goes out of the business). People who buy our goods on credits are our debtors and recorded as current assets in the balance sheet, because in future, we expect to collect are payments for the goods.