Bryle Jay P.

Lape BSA-III

In a Nutshell

1. A sales agency can maintain its own record of transactions or it can maintain its
record with the home office. Either way, at every end of the period, the records of the
sales agency are summed up with the records of the home office.

2. Branch can make transactions independently. They can keep records in their own
books except for transactions between them and the home office, and of ownership
equities.

3. Imprest fund system is usually used in agencies as home office provided them the
working fund.

4. Although branches operates independently, home office still has a control over it.
Management of branches still follows the regulations and mandates of their main
offices.

5. No entry should be recorded in the home office’s book when agencies, under
imprest fund system, incurred expenses because expenses are recorded as an adjusting
entries, or when working fund is replenished.

6. Branches can make merchandise purchases when necessary.

7. In comparison, sales agencies and branches accounts were both adjusted and
closed by the home office to determine their income.

8. Sales, cost of sales, and operating expenses summaries are the information needed
by the sales agency to provide to the home office.

9. The utilization of cash fund system, particularly imprest fund system, is an

efficient way of having adequate control of the home office over agency expenses.

10. Samples inventory-Agency is debited and Shipments to Agency is credited to the

books of home office when there is shipment of merchandise samples to agencies.