Scribd Logo
Upload

Welcome to Scribd!

  • AFAR2 HO Branch Chap13

    Uploaded by

    eia
    14 views20 pages
    An agency is a marketing arm of the home office that handles selling activities and augments the home office's sales force. It does not maintain inventory or offer credit to customers. A branch operates as a single business unit owned by the home office. It maintains its own inventory stock, sells directly to customers, offers credit, and has separate accounting books, though it remains under the control of the home office. Key distinctions between agencies and branches include whether they maintain inventory, sell directly to customers, offer credit, and have separate accounting.

    Original Description:

    Home office

    Original Title

    AFAR2-HO-Branch-Chap13

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    An agency is a marketing arm of the home office that handles selling activities and augments the home office's sales force. It does not maintain inventory or offer credit to customers. A branch operates as a single business unit owned by the home office. It maintains its own inventory stock, sells directly to customers, offers credit, and has separate accounting books, though it remains under the control of the home office. Key distinctions between agencies and branches include whether they maintain inventory, sell directly to customers, offer credit, and have separate accounting.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    14 views20 pages

    AFAR2 HO Branch Chap13

    Uploaded by

    eia
    An agency is a marketing arm of the home office that handles selling activities and augments the home office's sales force. It does not maintain inventory or offer credit to customers. A branch operates as a single business unit owned by the home office. It maintains its own inventory stock, sells directly to customers, offers credit, and has separate accounting books, though it remains under the control of the home office. Key distinctions between agencies and branches include whether they maintain inventory, sell directly to customers, offer credit, and have separate accounting.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 20

    Chapter 13

    End of the Coverage


    When a company aims to increase sales volume in other areas that
    cannot be conveniently reached out because of the distance, it
    establishes either an agency or a branch. Both units can develop
    market in areas away from the Home Office. However,
    An Agency – is just a marketing arm of the HO to handle selling
    activities or augment HO’s sales force.

    A Branch – operates as a single business unit but subject to the


    control by the HO as it indeed owned by the HO.

    More distinctions on the following slide =➔


    Branch and Agency Distinguished
    Agency Characteristics Branch

    does not maintain stocks of inventory, just Inventory Stock it maintains it own stock of inventory for sale which maybe
    working samples provided by the HO that work purchase from outsiders though mostly from the HO
    as advertising materials.

    no, only takes orders and forward to HO. HO sells Sells directly to customers Yes, sells directly to customers
    and delivers directly to customers

    No, only the HO. HO extends credits, collects Offer on credits Yes, the branch approves credits with the directives of the
    directly from customers. HO, collects from the customers.

    non, only a working fund provided by the HO Separate Cash Account Yup, may have its own bank accounts and with PCF that
    which is maintained under the Imprest System. is maintained under the Imprest System.
    with separate acctg. Books and system similar to the systems
    No separate acctg. books. HO does the recording Separate acct. Books of independent business except in a manner of accounting
    for ownership equities, no Capital or SHE. Also, Branch's
    Acctg system is patterned to the system of the HO.

    No separate accounting or business entity, HO Business Entity with separate business personality though 100% owned
    bears the responsibility of maintaining accts. by the HO.

    HO records agency's generated transactions: Recording The usual manner, transactions are kept separate from
    1. Separately from those of the HO the HO, Results of operations are reported to the HO
    2. Not kept Separate from those of the HO at the end of the acctg. Period
    Such fixed assets are still recorded in the books
    of the Home Office. An acknowledgement
    receipt or a memo entry is made only to account
    for the transfer.
    If the HO wishes to determine the net income of the agency
    separately, it will maintain separate sales revenue and expense
    accounts for the individual sales units. A supplementary record
    of the cost of goods sold of each sales unit must also be kept.

    The Shipments to agency account balance is subtracted from the


    goods available for sale of the HO to arrive at the Goods
    available for Sales of the HO Sales.

    Illustration on the following page ==➔


    Part 1

    You might also like