11/22/23, 7:51 PM Home Office and Branch Accounting Quiz

Home Office and Branch Accounting Quiz

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Home Office and Branch Accounting Quiz

Home Office and Branch Accounting (General Procedures and Special Problems)

The home office ships merchandise to its branch above cost. What journal 1 point
entry should the branch make to record receipt of the shipment?

dr. Home office cr. shipment from home office

dr. Home office cr. shipment to branch

dr. Shipment from home office cr. allowance for overvaluation of inventory

dr. Shipment from home office cr. home office

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11/22/23, 7:51 PM Home Office and Branch Accounting Quiz

Of the following two statements, which one(s) is (are) correct, if any 2 points

A transfer of merchandise from the home office to one of its branches

should be recorded with a(n):
I. Decrease in the branch's Home Office account
II. Increase in the home office's Investment in Branch account

I and II

I only

II only

Neither I nor II

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The home office ships merchandise to its branch at 20% above cost. The 2 points
branch's books show a beginning inventory of home office merchandise of
30,000 and shipments from home office of 180,000. What is the balance
before closing in the Allowance for Overvaluation of Branch Inventory
account?

35,000

36,000

42,000

52,500

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11/22/23, 7:51 PM Home Office and Branch Accounting Quiz

The home office ships merchandise to the branch at 25% above cost. If the 2 points
balance before closing in the Intracompany inventory Profit account is
66,000 and Shipments from Home office amounted to 300,000, what was
the cost of the branch's beginning inventory?

24,000

30,000

80,000

96,000

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Which one of the following is not a reciprocal account? 1 point

Home Office

Branch noncurrent

Branch current

Inter-company accounts

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11/22/23, 7:51 PM Home Office and Branch Accounting Quiz

Which of the following statements is correct? 1 point

A sales agency normally accounts for its operations on its own set of books.

Branches normally maintain only minimum accounting records.

A sales agency generally operates with a greater degree of autonomy than does a
branch

A branch generally operates with a greater degree of autonomy than does a sales
agency.

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The home office ships merchandise to the branch at 50% above cost. On its 2 points

books the branch shows a beginning inventory of home office merchandise

amounting to 15,000 and shipments from home office of 110,000. Its ending
inventory of home office merchandise is 5,000. What amount should the
home office adjust the allowance for overvaluation of branch inventory
account?

40,000

55,000

60,000

62,500

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11/22/23, 7:51 PM Home Office and Branch Accounting Quiz

CJ Corporation has a branch in Peru. The branch reported income of 2 points

130,000 for 2016. The branch has a balance in its Home Office account at
the end of the year, after closing, of 765,000. Branch income has not been
recorded by CJ's home office. During the year, CJ shipped inventory to the
branch at a price of 160,000; CJ's original cost was 90,000. All but 45% of
the inventory has been resold to unrelated parties by year-end. What is the
balance in CJ's Investment in Branch account?

594,500

603,500

635,000

765,000

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The home office ships merchandise to the branch at an amount above cost. 1 point

How should the Investment in Branch account be debited?

at cost

at billed price

at selling price

at billed price less cost

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11/22/23, 7:51 PM Home Office and Branch Accounting Quiz

A home office's Investment in Branch account is a(n): 1 point

Equity

Asset

Capital

Liability

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When an asset is transferred to a branch from the home office, which of the 1 point
following occurs?

A credit to Investment in Branch

A debit to Home Office account

A debit to Investment in Branch

Only a memo entry is made

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11/22/23, 7:51 PM Home Office and Branch Accounting Quiz

Ash starts a branch operation on January 1, 2016. Inventory costing 72,000 2 points
is shipped to this branch at a transfer price of 100,000. Freight is an
additional 6,000. The branch sells 70% of this inventory for 110,000 and
remits 70,000 in cash to the home office. On Ash' financial statements for
this period, what is the appropriate Cost of Goods Sold amount?

50,400

54,600

70,000

74,200

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Oreo, Inc. has a branch operation located in Baguio. On the home office 2 points

financial record, Oreo reports Investment in Baguio branch account with a

P78,000 debit balance. At that same time, the branch operation is reporting
a Home Office account with an P81,000 credit balance.
Which of the following statements is true?

The difference indicates that cash may be in transit from the branch to the home
office

Cash may have been collected by the home office for the branch but not yet reported
to the branch

The difference indicates that inventory may be in transit from the home office to the
branch

Since two different sets of records are being kept, these two accounts are designed
to agree

Clear selection

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