Match each branch accounting characteristic or operational procedure on the left with its corresponding branch classification and accounting treatment on the right.
- Centralized record-keeping at Head Office where the outlet remits all receipts daily and maintains no formal ledgers.Dependent branch operating under basic centralized accounting.
- Preparation of a separate trial balance by the branch and maintenance of a reciprocal Head Office Account in the branch ledger.Independent branch operating with full double-entry accounting autonomy.
- Despatch of goods from Head Office to the branch above cost to hide profit margins from local branch managers.Dependent branch operating under the cost-plus selling/invoice price method.
- Authority to purchase inventory independently from external suppliers and maintain separate local trade payable records.Independent branch exercising operational purchasing authority.
Answer
The correct pairings match dependent branch centralized accounting with daily remittance of receipts, independent branch accounting autonomy with trial balance extraction and reciprocal accounts, dependent branch invoice price methods with goods billed above cost, and independent branch operational autonomy with external local purchasing.
Each feature correctly corresponds to the accounting boundaries of dependent and independent branches: dependent branches operate with centralized accounting or controlled invoice pricing from Head Office, while independent branches maintain separate double-entry books, extract trial balances, and manage local transactions.
Step-by-Step Solution
Key Concept
Distinction between dependent and independent branches based on accounting record maintenance, trial balance extraction, invoice pricing, and local purchasing authority.