1. The freight on shipments to the branch paid by the home office is recorded by the office as A. Debit to freight-in B. Credit to freight-in C. Credit to investment account D. Credit to cash 2. Transaction between a home office and its branch are accounted for in reciprocal accounts. The reciprocal account maintained in the branch books is called. A. Investment in branch B. Home Office C. Purchase from home office D. Any of these 3. The depreciation expense on equipment carried in the books of the home office but used by the branch is recorded in the branch’s books as A. Debit to investment in branch and credit to accumulated depreciation B. Debit to depreciation expense and credit to investment in branch C. Debit to depreciation expense and credit to home office account D. Not recorded 4. The branch records a debit memo received from the home as A. Debit to home office account B. Debit to allocated expense C. Debit to investment account D. Credit to home office account 5. Transactions between branches are recorded by the transacting branches A. As if each of them is transacting with the home office. B. By debiting or crediting their own inter-branch accounts. C. As if each of them is transacting with the home office and by debiting or crediting their own inter-branch accounts. D. Not accounted for by the branches True or False? 6. Unlike for a “sales agency” a “branch” has its own separate books of accounts and prepares its own financial statements. True or False? 7. Sale transactions between the home office and its branch are taxable because the home office and the branch are separate legal entities. True or False? 8. The “Investment in branch” is an asset account in the branch’s individual financial statements. True or False? 9. The home office records inventory shipments to the branch by debiting the “shipments to branch account”. True or False? 10. The branch nonetheless records the depreciation for an asset that is uses even if the asset is carried the home office books.
1. The freight on shipments to the branch paid by the home office is recorded by the office as
A. Debit to freight-in
B. Credit to freight-in
C. Credit to investment account
D. Credit to cash
2. Transaction between a home office and its branch are accounted for in reciprocal accounts. The reciprocal account maintained in the branch books is called.
A. Investment in branch
B. Home Office
C. Purchase from home office
D. Any of these
3. The
A. Debit to investment in branch and credit to
B. Debit to depreciation expense and credit to investment in branch
C. Debit to depreciation expense and credit to home office account
D. Not recorded
4. The branch records a debit memo received from the home as
A. Debit to home office account
B. Debit to allocated expense
C. Debit to investment account
D. Credit to home office account
5. Transactions between branches are recorded by the transacting branches
A. As if each of them is transacting with the home office.
B. By debiting or crediting their own inter-branch accounts.
C. As if each of them is transacting with the home office and by debiting or crediting their own
inter-branch accounts.
D. Not accounted for by the branches
True or False? 6. Unlike for a “sales agency” a “branch” has its own separate books of accounts and prepares its own financial statements.
True or False? 7. Sale transactions between the home office and its branch are taxable because the home office and the branch are separate legal entities.
True or False? 8. The “Investment in branch” is an asset account in the branch’s individual financial statements.
True or False? 9. The home office records inventory shipments to the branch by debiting the “shipments to branch account”.
True or False? 10. The branch nonetheless records the depreciation for an asset that is uses even if the asset is carried the home office books.
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