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  • Home Office and Branch Accounting: Intracompany/ Reciprocal Accounts

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    Bernardino PacificAce
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    This document discusses accounting procedures for home office and branch operations. It addresses intracompany reciprocal accounts like the investment in branch and home office current accounts. Interbranch transactions are eliminated in the accounts. The document also covers accounting for branch plant assets, treating expenses, and computing net income on branch books using billed prices for inventories, which can overvalue COGS and undervalue net income.

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    HOME-OFFICE-AND-BRANCH-ACCOUNTING

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    This document discusses accounting procedures for home office and branch operations. It addresses intracompany reciprocal accounts like the investment in branch and home office current accounts. Interbranch transactions are eliminated in the accounts. The document also covers accounting for branch plant assets, treating expenses, and computing net income on branch books using billed prices for inventories, which can overvalue COGS and undervalue net income.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    28 views10 pages

    Home Office and Branch Accounting: Intracompany/ Reciprocal Accounts

    Uploaded by

    Bernardino PacificAce
    This document discusses accounting procedures for home office and branch operations. It addresses intracompany reciprocal accounts like the investment in branch and home office current accounts. Interbranch transactions are eliminated in the accounts. The document also covers accounting for branch plant assets, treating expenses, and computing net income on branch books using billed prices for inventories, which can overvalue COGS and undervalue net income.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    HOME OFFICE AND

    BRANCH ACCOUNTING
    INTRACOMPANY/ RECIPROCAL ACCOUNTS
    • Investment in Branch ( Branch Current)
    • Home Office ( Home Office Current)

    * Outside Transactions are recorded in usual manner


    *Interbranch transactions are eliminated(Shipment to and From)
    ACCOUNTING FOR BRANCH PLANT
    ASSETS
    TREATMENT OF EXPENSE
    NET INCOME ON BRANCH BOOKS
    Inventories of Branch is stated at BILLED PRICES
    COGS is over valued = Net income is undervalued
    COMPUTATIONS
    COMPUTATIONS

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