BRANCH AUTO

BRANCH ACCOUNTING

Autonomous / Independent Branch

AUTONOMOUS / INDEPENDENT BRANCH

1 2 3

FINANCE BRANCH ALLOW BRANCH TO ALLOW BRANCH TO
OPERATIONS TRADE ACQUIRE GOODS
INDEPENDENTLY FROM HO & OTHER
SUPPLIER

HO BOOK BRANCH CURRENT RECORD ALL
ACCOUNT TRANSACTION
BETWEEN HO &
RECORD BRANCH BRANCH
PROFIT BELONGING
TO HO BALANCE REPRESENT
THE INVESTMENT MADE
BY HO IN THE BRANCH.

HEAD OFFICE CURRENT
ACCOUNT

BRANCH BOOK THE BALANCE RECORD ALL
REPRESENT THE TRANSACTION
BRANCH’S CAPITAL BETWEEN BRANCH &

ACCOUNT HO

PROFIT BALANCE MUST
BE TRANSFERRED TO
THE ACCOUNT AT THE
END OF THE PERIOD

CURRENT ACCOUNTS

HO BOOKS BRANCH BOOKS

BRANCH CURRENT ACCOUNT (ACCOUNTS RECEIVABLE)

HO CURRENT ACCOUNT (ACCOUNTS PAYABLE)

BAL B/D X CASH IN TRANSIT X BAL B/D X
GOODS IN X BANK - EXPENSES X
BANK - EXPENSES TRANSIT XX
P&L - PROFIT P&L - PROFIT X
X
X BAL C/D

BAL C/D XX ASSET - PURCHASE BY HO

BALANCES MUST BE AGREE

SOFP – FOR USED TO
COMBINED RECORD
OPERATION – TRANSACTION
BALANCES WOULD BETWEEN THE
CANCEL OUT EACH HO AND THE
BRANCH
OTHER
BALANCES
MUST BE
AGREE

CURRENT ALLOWANCE FOR PROFIT EARN BY
ACCOUNTS UNREALISED PROFIT BRANCH BELONG TO

ON INVENTORIES THE FIRM (MUST BE
MUST BE ADJUST IN CREDITED TO THE HO
(CURRENT ACCOUNT)
SOCI

GOODS ARE
INVOICED TO

BRANCH
ABOVE COST

PRICE

ALLOWANCE FOR
UNREALISE PROFIT

• Will be shown after the closing inventories to adjust the invoice price of the
closing inventories.

• The goods to branches accounts is credited with the full transfer price
• At year end an adjustment is made relative to the INCREASE or DECREACE to

the unrealized profit account.

Allowance for Unrealised Profit

SOCI (Revenue) Bal b/d (Opening)
Bal c/d (Closing) SOCI (expenses)

FORMULA URP (AFUP)

• Value of opening/closing inventories at cost in the combined column

HO at cost XX

Branch at SP X XX
XX
GIT X

less:

AFUP (X)

Inventories of branch at cost

IN TRANSIT

IF THE BALANCES DO NOT AGREE, MUST BE INVESTIGATE AND CORRECTED.

DIFFERENCES ARE USUALLY CAUSED BY TRANSIT ITEM

• GOOD IN TRANSIT • CASH IN TRANSIT

• Goods in transit refers to merchandise and • A deposit in transit is cash (currency, coins,
other types of inventory that have left the checks, electronic transfers) that a
shipping dock of the seller, but not yet company has received and is rightfully
reached the receiving dock of the buyer. reported as Cash on its balance sheet, but
does not appear on the bank statement
until a later date. ... The money is deposited
each evening in the bank's night depository.