Presented by- Afsar Ali 82
Pawan 85
Pooja 86
Sashi 98
Ravi 108
contents
 Introduction
 Different types of branches
 Home branches
 Foreign branches
 Important branch

Method of keeping accounts of dependent branches
Branch

A trading company may try to
expand its business by opening
BRANCHES as another
establishment of the company in
different locations…
3
TYPES OF BRANCHES
HOME
BRANCHES
DEPENDENT
BRANCHES
FOREIGN
BRANCHES
INDEPENDENT
BRANCHES
HOME BRANCHES
When a branch is opened in the same country
where the head office is registered, it is called
a home branch. Home branch are of two types-
(a) Dependent branches- The branch that do
not maintain a complete record of its
transactions are called ‘Dependent branches’.
(b) Independent branches- Independent
branches are those branches which maintain a
complete record of its transactions.
Various types of branches
 branch selling only for cash.
 branch selling both for cash and
credit.
 goods invoiced to branch at a higher
than the cost.
 Branch maintaining independent
account.
IMPORTANT TERMS
1. INTER-BRANCH TRANSACTIONS- When a
branch sends goods or cash to another branch, it
is called inter-branch transactions.
2. Accounting treatment: The best way to deal
with inter-branch transactions is to record these
transactions by the concerned branches through
the head office.
GOODS IN TRANSIT: When the goods sent by
head office are not received by the branch till the
date of closing of books of accounts, those goods are
called goods in transit
CASH IN TRANSIT: It is quiet common
that the head office and the branch send cash to
each other at regular intervals.
THERE ARE THREE METHODS OF KEEPING
ACCOUNTS OF DEPENDENT BRANCHES:
• DEBTORS SYSTEM
• FINAL ACCOUNT SYSTEM
• STOCK AND DEBTOR SYSTEM
This system is used for branches of small size.
Under this method the head office prepares a
‘branch account’ separately for each branch.
Branch account is a nominal account which
gives us the profit or loss made at branch.
Under this system the profit or loss
made by the branch is ascertained by
preparing the ‘branch trading and
profit & loss account….
In this system the main account to be kept is
the branch account to ascertain the profit
and loss made at the branch. There is
another method is known as stock and debtor
system….