Question 1of 10

Transaction between a home office and its branch are accounted for in reciprocal accounts. The
reciprocal account maintained in the branch book is called

Select the correct response:

Any of the given
Investment in branch
Home office
Advances from home office
Question 1of 10
Transaction between a home office and its branch are accounted for in reciprocal accounts. The
reciprocal account maintained in the branch book is called

Select the correct response:

Any of the given
Investment in branch
Home office
Advances from home office

Question 2 of 10
The freight on shipments to branch paid by the home office is recorded by the home office as

Select the correct response:

Credit to investment account
Debit to freight in
Credit to freight in
Credit to cash

Question 3 of 10
A cash remittance from the branch to the home office is recorded by the home office as

Select the correct response:

Debit to home office
Debit to investment account
Credit to investment account
Credit to cash

Question 4 of 10
The depreciation expenses on equipment being used by the branch but carried in the books of the
home office is recorded in the branch's books as

Select the correct response:

Debit to investment in branch and credit to accumulated depreciation
Debit to depreciation expense and credit to investment in branch
Debit to depreciation expenses and credit to home office account
Not recorded

Question 5 of 10
A debit memo received from the home office is recorded by the branch as

Select the correct response:

 Debit to home office account
Credit to home office account
Debit to investment account
Debit to allocated expense

Question 6 of 10
The freight on shipments to branch paid by the branch is recorded by the home office as

Select the correct response:

Debit to freight in
Not recorded
Credit to freight in
Credit to investment account

Question 7 of 10
For external reporting, the individual financial statements of the home office and the branch are
combined

Select the correct response:

by adding together similar items of assets, liabilities, income and expenses and eliminating
reciprocal accounts
by recognizing the home office's own assets, liabilities, income and expenses plus its share in
the branch's assets, liabilities, income and expenses
by using complex consolidation procedures
by adding together similar items of assets, liabilities, income and expenses

Question 8 of 10
Transaction between branches are recorded by the transacting branches

Select the correct response:

as if each of them is transacting with the home office AND by debiting or crediting their own
investment in branch account
a branch is not permitted to transact with another branch
by debiting or crediting their own investment in branch account
as if each of them is transacting with the home office

Question 9 of 10
A credit memo received f rom the branch is recorded by the home office as

Select the correct response:

Credit to investment account
Credit to allocated expenses
Credit to home office account
Debit to investment account
Question 10 of 15
The combined profit of the entity is equal

Select the correct response:

to the individual profits of the home office and the branch after
eliminating any unrealized mark-up during the period
to the individua l profit of home office plus the true profit of the branch.
to the true profit of the home office plus its share in the profit of the branch.
 to the individual profits of the home office and the branch.

Question 11 of 15
An agency maintains its own separate books of accounts similar to a branch.

Select the correct response:

True/False

Question 12 of 15
For external reporting, the financial statements of the branch are combined with the financial
statements of the home office and the other branches.

Select the correct response:

True/False

Question 4 of 15
A branch reported cash of P2 while the home office reported cash of P10.The total cash in the
combined financial statements therefore is P13.

Select the correct response:

True/False

Question 13 of 15
After year-end adjustments but before elimination entries, the balance in the "allowance for
mark-up on shipments to branch"

Select the correct response:

is equaIto zero
represents the unrealized mark-up
represents the realized mark up
represents profit

Question 9 of 15
The 'Home office" is an equity account in the combined financial statements of the home office.

Select the correct response:

True/False