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Tuhi Nirankar
INLAND BRANCH
From the accounting point of view, the branches may be classified as  follows:
BranchesInland Branches Foreign BranchesDependent Branches Independent Branches
Dependent Branches :
A dependent branch is on whose policies and administration ae totally controlled by thehead office and head office maintains the accounts of the branch.In case of retail selling branches, the head office may maintain the accounts of such branches by any of thefollowing methods:(1)Debtors System. (2)Stock and Debtors system. (3)Final Account System. (4)Wholesale Branch System. 
Note :
As the requirement of the Syllabus, we shall discuss Dependent branches and Ascertainment of Profit byDebtor Method and Stock and Debtor Method.
Debtor System :
Under this method the head office prepares a separate account for each branch on the basis of itslocation such as Mumbai Branch, kolkata Branch and so on or a code number may be used for each branch. TheBranch Account, under this system, is a
nominal account 
. Goods may be sent to the branch at cost or at selling price. Selling price is also known as invoice price. The accounting procedures in cost price method and invoice price method is slightly different.
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TUHI NIRANKAR
 
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Tuhi NirankarFormat of Branch Account at
cost price
is shown below :In the books of Head Office.....................Branch AccountDr.Cr. ParticularsRs.ParticularsRs.
To Balance b/dFurnitureStock DebtorsPrepaid ExpensesPetty CashTo Goods Sent to Branch A/cGoods sent by H.O.Goods sent by other branchesTo Bank SalariesRent and RatesPetty CashTo Balance c/dCreditorsOutstanding ExpensesTo Net Profit transferred toGeneral Profit and Loss A/cxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxBy Balance b/dCreditorsOutstanding ExpensesBy Bank A/cCash Sales 
Cash Received from DebtorsCash sent by DebtorsDirect to the H.O.By Goods sent to BranchReturned by Branchto the H.O.Returned by Branchto other BranchesReturned by Debtorsdirectly to H.O.By Balance c/dFurnitureLess : DepreciationStock DebtorsPrepaid ExpensesPetty Cash*By Net Loss transferred toGeneral Profit or Loss A/c 
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
*
Either of the two will appear. 
Invoice Price method :
When the goods are sent by the head office to the branch at selling price or invoice pricei.e. Cost plus some percentage of profit, the branch manager is required to sell the goods at invoice price only. Themethod of preparation of Branch Account is same as in case of cost price method except that the journal entriesrelating to opening stock, goods sent to branch, goods return to head office and closing stock are mde at invoice price and to remove the loading (difference between the invoice and cost price) the following adjustment entries aremade:1.For removing loading from the amount of opening stock :Stock Reserve A/c Dr. To Branch A/c
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