Statement 1: In the absence of any errors or reconciling item, or when transactions between the home office and the branch are properly recorded, it is expected that the reciprocal account, home office and branch accounts, are of the same amount. Statement 2: Excessive freight costs for interbranch transfers should be absorbed as an expense by the office directing the transfers, because it represents management mistakes or inefficiencies. O False, False O True, False O True, True O False, True

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Statement 1: In the absence of any errors or reconciling item, or when transactions between
the home office and the branch are properly recorded, it is expected that the reciprocal
account, home office and branch accounts, are of the same amount.
Statement 2: Excessive freight costs for interbranch transfers should be absorbed as an
expense by the office directing the transfers, because it represents management mistakes or
inefficiencies.
O False, False
O True, False
O True, True
False, True
Transcribed Image Text:Statement 1: In the absence of any errors or reconciling item, or when transactions between the home office and the branch are properly recorded, it is expected that the reciprocal account, home office and branch accounts, are of the same amount. Statement 2: Excessive freight costs for interbranch transfers should be absorbed as an expense by the office directing the transfers, because it represents management mistakes or inefficiencies. O False, False O True, False O True, True False, True
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