In a Nutshell Explain the use of reciprocal ledger accounts in home office and branch accounting systems. These are accounts to record transactions between Home Office and the Branch simultaneously in order to accurately record the transaction event of both between the two. The accounting records maintained by the Home Office ledger account is credited for all merchandise, cash, or other resources provided by the home office and is debited for all cash merchandise or other asset sent to the home office or to other branches. When the branch closes its accounts at the end an accounting period, the Income Summary account will be closed to the Home Office account then a net income increases the credit balance of the Home Office account; a net loss decreases this balance.