State whether the following statements are True or False
- Branch accounting is concerned with recording of transactions of different branches in respect of their association with the H.O., with other branches as well with outsiders.
- Dependent branches are mere selling agencies and are controlled by the H.O.
- Goods supplied to branches for sale are always invoiced at market price only.
- Dependent branches perform accounting functions for themselves.
- A branch account is a combination of real accounts and nominal accounts.
- Petty expenses paid by the branch manager out of cash in hand in the branch are not shown in the branch account.
- Usually, dependent branches do not sell goods on credit.
- Entities have to be made in the branch account in respect of sales returns and discount allowed.
- When goods are transferred between H.O. and branches at a price above cost, it is termed as “loaded price.”
- Credit purchases would appear in the branch account.
- Credit sales would not affect the branch account directly.
- Under Debtors System, control over the stock can be exercised effectively.
- Under Stock-Debtors System, all items are entered in the branch stock account at loaded price only.
- When the stock appears at the loaded price, it is essential to open Stock Reserve Account.
- Normal loss affects both gross profit and net profit.
- Abnormal loss affects only gross profit.
- Independent branches also operate within the framework of broad policies laid down by the H.O.
- Goods in transit appear as an asset in the balance sheet.
- Cash in transit is a liability.
- Goods returned by customers direct to branch are recorded in branch account.