BCom Financial Accounting Study Material Notes Branch Accounts

BCom Financial Accounting Study Material Notes Branch Accounts

BCom Financial Accounting Study Material Notes Branch Accounts : In this post of B.Com financial  Accounting notes for Branch Accounts EDULIGHT.PRO PROVIDE information about BRANCH ACCOUNTS  AND ITS DIVISION. B.Com.finacial accounting notes for branch accounts also tell us how a business grow and increase its profits.

BCom Financial Accounting Study Material Notes Branch Accounts

BCom Financial Accounting Study Material Notes Branch Accounts


As a business grows, it may open branches in different towns and cities within country or outside country in order to market its product over a large territory and, thus, increase its profits. In this topic B.Com. Financial Accounting notes for Branch Accounts : A branch may be defined as a section of an enterprise, geographically separated from the rest of the business, controlled by a Head Office and generally carrying on the same activities as of the enterprise. For example, Bata Shoe Co. has branches in various cities all over the country. The same example holds good for a commercial bank also.

WHAT IS THE TERM BRANCH ACCOUNTS  (Study Material for BCom 1st Year)

BCom Financial Accounting Study Material Notes Branch Accounts :  The term ‘Branch Accounts’  refer to record of transaction of branches, whether relating to deal with Head Office or with outsiders or deal between different branches in the books of Head office. In order to exercise greater control over the branches, it is necessary to ascertain profit or loss made by such branches separately. For this purpose, a proper accounting system is to be adopted for recording business transactions between Head Office and Branches. The accounting system to be adopted for the branch depends upon the size and nature of branch and the degree of control required by the Head Office. Thus, branches can be broadly classified into two categories for the purpose of recording transactions in the books of accounts.

Home Branches: It has two types of branches:

 Dependent Branches :

Dependent branches are those   branches which are bot keeping their own separate set of books of accounts. The relation between head office and branch is just like agency, therefore, these are also known as agency branches.

  Independent Branches Notes:

A branch is said to be independent when it maintains a separate set of books of accounts and keeps a full system of accounting. In other words, the branch carries on business as an independent unit, records all the transactions in its own books, extracts its own Trial Balance  and prepares its own Trading and Profit and Loss Account.

Foreign Branches (BCOM 1st Year Study Material)

A foreign branch is nothing but an independent branch and located outside country. It maintains its accounts in a foreign currency because all transactions are made in the currency  of that country. Trial balance is prepared form the foreign branch books and send to the head office for incorporating in its books. The head office has to convert the trial balance received into currency of its own currency before incorporating the trial balance in its books of accounts, because of the facts that the foreign branch trail balance will be in the currencies of the country in which the branch is operating. After that branch trial balance is incorporated as usual in the books of the head office to prepare the final accounts.

See Also : Complete Topic/Chapter Wise Study Material for BCom 1st Year

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