Which of the following is a common cause of a discrepancy between head office and branch trial office ______?

A. Stock and repayment
B. Creditors and cash in transit
C. Stock and cash in transit
D. Debtors and cash in transit

Correct Answer:

Option C – Stock and cash in transit

Explanation

Goods in transit are goods sent by the head office to branch but by the close of financial year, these goods have not yet reached the branch.

Cash in transit are cash remitted by the branch to head office by the end of the financial year this cash has not yet reached the head office

Another major cause of the discrepancy is returned in transit. This is the returns by the branch to head office but by the end of the year, they have not been received by the head office