The working paper elimination journal entries to eliminate the intercompany shipments of

merchandise will include a debit to:

[A] Shipments to branch

[B] Shipments from home office

[C] Shipments to home office

[D] Purchases bining worksheet

S1: The balance of the Shipments to Branch account is subtracted from the total of beginning
inventory and purchases in the computation of the home office’s cost of goods sold for the period. S2:
The home office’s Shipments to Branch and the branch’s Shipments from Branch account are nominal
accounts and therefore closed at the end of the period to the income summary account together with
the other revenue and expense account correct

A] Both statements are

[B] Neither of the statements is correct.

[C] Only S1 is correct

[D] Only S2 is correct

The Home Office Current account on the books of the Branch is comparable to:

[A] an asset account

[B] an ownership equity account

[C] a liability account

[D] a contra-asset account.

The adjustments (excluding those adjustments for in-transit items and errors) appearing on the
worksheet used in preparing combined financial statements of the Home Office and the Branch

[A] are recorded in the accounting records of both the Home Office and the Branch

[B] are recorded in the accounting records of the Home Office only

[C] are recorded in the accounting records of either the Home Office or the Branch

[D] none of the choices