1. Conceptual Framework and Classification of Branches

In the contemporary global business environment, commercial enterprises rarely restrict their operations to a single physical location. As businesses expand their market penetration, exploit economies of scale, and strive to capture diverse geographic consumer bases, they establish multiple operating outlets across various cities, states, and nations. In corporate and financial accounting, the primary, central establishment where the strategic management resides is designated as the Head Office (H.O.), while the secondary, geographically dispersed operating units established to market goods or deliver services are legally and operationally defined as Branches.

Branch Accounting is the specialized branch of financial accounting designed to systematically record, classify, analyze, and consolidate the economic transactions occurring between the Head Office and its various branch establishments, as well as between different branches themselves.

1.1 Objectives of Branch Accounting

The establishment of a specialized branch accounting system serves several vital operational and strategic management functions:

Ascertaining Individual Branch Profitability: To compute the precise net profit or net loss generated by each individual branch outlet, enabling executive management to identify high-performing profit centers and eliminate non-viable, loss-making locations.
Maintaining Stringent Operational & Inventory Control: To establish an airtight accounting check on the physical movement of goods, cash collections, and operating expenses, drastically reducing employee pilferage, unauthorized discounting, and inventory shrinkage.
Evaluating Branch Managerial Efficiency: To evaluate the performance of branch managers objectively by comparing actual branch revenues and operating expense ratios against historical benchmarks and corporate budget targets.
Strategic Resource & Capital Allocation: To determine the exact financial requirements (working capital, stock replenishment, capital equipment) of each branch to optimize overall corporate liquidity.
Consolidation and Statutory Compliance: To facilitate the seamless consolidation of all branch financial results into the master financial statements of the Head Office for taxation, auditing, and corporate statutory reporting.

1.2 Distinction Between a Branch and a Department

Although both branches and departments function as organizational sub-units of a parent business, they differ fundamentally across geographic, administrative, and accounting dimensions:

Basis of Distinction	Branch	Department
1. Geographic Location	Geographically dispersed across different cities, regions, or international countries.	Located within the same physical premises or roof (e.g., Clothing, Electronics, Groceries in a mall).
2. Operational Nature	Functions as a distinct operating unit carrying out complete commercial sales cycles.	Functions as a specialized product or functional division within a single store.
3. Expense Allocation	Operating expenses (rent, salaries, electricity) are directly identifiable and incurred by the specific branch.	Common expenses (building rent, central air conditioning, director fees) must be artificially apportioned across departments.
4. Accounting System	Accounts may be maintained either centrally at Head Office (Debtor system) or independently at the branch.	Accounts are strictly maintained centrally under a columnar departmental accounting system.
5. Goods Movement	Movement of goods involves formal packing, transport freight, transit insurance, and delivery challans.	Involves simple internal transfers between departments via internal requisition slips.

1.3 Classification of Branches

From an accounting perspective, branches are categorized strictly based on their geographic territory and their degree of accounting independence from the Head Office:

1. Inland Branches (Home Branches)

Branches established and operating within the geographic and legal boundaries of the home country where the Head Office is domiciled. Inland branches are sub-classified into:

Dependent Branches: Outlets that possess zero accounting autonomy; all formal financial books are maintained exclusively by the Head Office.
Independent Branches: Outlets that maintain their own comprehensive, autonomous double-entry accounting records, extracting an independent trial balance at year-end.

2. Foreign Branches

Branches located outside the national borders of the home country. They operate in a foreign jurisdiction, conduct all commercial transactions in foreign currency, maintain autonomous books, and require specialized foreign currency translation (under AS 11 / Ind AS 21) to convert foreign trial balances into domestic reporting currency.

1.4 Operational Characteristics of Dependent Branches

Dependent branches are simple retail outlets designed exclusively to distribute goods manufactured or procured centrally by the Head Office. Their operations are characterized by rigid central control:

Centralized Inventory Supply: The branch is not permitted to purchase goods locally from third-party wholesalers. 100% of its merchandise is supplied directly by the Head Office.
Centralized Expense Financing: All major branch operating expenses—such as shop rent, manager salaries, insurance premiums, and municipal taxes—are paid directly by the Head Office via corporate bank transfers or cheques.
Petty Cash Imprest System: For minor, daily out-of-pocket expenses (stationery, local cartage, cleaning supplies, postage), the Head Office provides the branch manager with a small float maintained under the Imprest System of Petty Cash.
Mandatory Remittance of Cash: The branch manager is strictly forbidden from utilizing daily customer cash collections to pay for local expenses. Total daily collections (from cash sales and credit customer recoveries) must be deposited daily into the Head Office bank account or remitted immediately.
Restricted Credit Policies: If credit sales are permitted, customer credit limits, collection periods, and debt-recovery policies are strictly governed by Head Office rules.

2. Accounting for Dependent Branches: The Debtors System

When accounting for dependent branches, the Head Office may adopt one of several methods depending on the scale and complexity of the branch. The most widespread, streamlined method used for small to medium-sized dependent retail outlets is the Debtors System (also known as the One-Account System).

2.1 Nature and Structure of the Branch Account

Under the Debtors System, the Head Office opens a single, comprehensive account in its general ledger for each individual branch, titled "[Name] Branch Account" (e.g., Cochin Branch Account, Calicut Branch Account). Although it is formally structured as a personal account (reflecting the H.O.'s net financial relationship with the branch as an entity), it functions substantively as a Nominal Account. Its primary purpose is to calculate the operating net profit or net loss generated by that specific branch over the financial year.

2.2 Case A: Goods Invoiced to Branch at Cost Price

When the Head Office supplies goods to the branch at exact cost price (with zero markup), the Branch Account operates under straightforward matching principles:

Format: [Location] Branch Account (At Cost Price) In the Ledger of Head Office

Dr. Particulars (Charges & Outflows)	Amount ($)	Cr. Particulars (Recoveries & Inflows)	Amount ($)
To Opening Branch Assets (Balance b/d):		By Opening Branch Liabilities (Balance b/d):
• Branch Stock (at cost)	XX,XXX	• Branch Creditors / Outstanding Exp.	X,XXX
• Branch Debtors	XX,XXX	By Bank Account (Remittances from Branch):
• Branch Petty Cash	X,XXX	• Cash Sales collected	XX,XXX
• Branch Prepaid Expenses / Furniture	X,XXX	• Cash collected from Debtors	XX,XXX
To Goods Sent to Branch A/c (Goods dispatched)	XX,XXX	By Goods Sent to Branch A/c (Goods returned by branch)	X,XXX
To Bank Account (Cheques for Rent, Salaries, etc.)	XX,XXX	By Closing Branch Assets (Balance c/d):
To Closing Branch Liabilities (Balance c/d):		• Branch Stock (at cost)	XX,XXX
• Branch Outstanding Expenses / Creditors	X,XXX	• Branch Debtors	XX,XXX
To General Profit & Loss Account (Net Profit - Bal. Fig.)	XX,XXX	• Branch Petty Cash / Prepaid Exp.	X,XXX
		By General Profit & Loss Account (Net Loss - Bal. Fig.)	XX,XXX

2.3 Internal Transactions NOT Recorded in the Branch Account

A critical rule in branch accounting states that transactions occurring strictly within the internal domain of the branch are completely omitted from the Branch Account in Head Office books. These internal transactions include:

Credit Sales: Credit sales do not represent a direct flow of value between H.O. and Branch. Instead, credit sales increase Branch Debtors and reduce Branch Stock. Since Opening and Closing Debtors/Stock are already included, recording credit sales would constitute double counting.
Bad Debts Written Off & Discount Allowed to Debtors: These reduce the closing balance of Branch Debtors. Since the closing debtors figure is already reduced by these losses, entering them separately would distort branch profit.
Returns Inward (Goods returned by customers to the Branch): Simply shifts value from Debtors back into Branch Stock.
Depreciation on Branch Fixed Assets: Handled automatically by entering the closing fixed asset at its written-down value (Opening Cost − Depreciation) on the credit side.

Reconstructing Memorandum Branch Debtors Account

When drafting the Branch Account, if the problem fails to provide either Opening Debtors, Credit Sales, Cash Collected from Debtors, or Closing Debtors, the accountant must draft a Memorandum Branch Debtors Account as a working note to deduce the missing balancing figure.

Memorandum Branch Debtors Account (Working Note) Deduction of Missing Figures

Dr. Particulars	Amount ($)	Cr. Particulars	Amount ($)
To Balance b/d (Opening Debtors)	XX,XXX	By Cash / Bank (Collections received)	XX,XXX
To Credit Sales (Balancing Figure if missing)	XX,XXX	By Discount Allowed	X,XXX
To Bank (Cheques from debtors dishonoured)	X,XXX	By Bad Debts written off	X,XXX
		By Returns Inward (Sales returns by debtors)	X,XXX
		By Bills Receivable received	X,XXX
		By Balance c/d (Closing Debtors - Bal. Fig.)	XX,XXX

3. Debtors System: Goods Invoiced at Invoice Price (Loading Mechanics)

In modern commercial retail chains, the Head Office rarely discloses the actual cost price of merchandise to branch managers. Instead, goods are invoiced to the branch at a marked-up price, known as the Invoice Price (I.P.). The invoice price is computed by adding a predetermined profit percentage (the Loading) to the basic cost price.

Equation: Invoice Price (I.P.) = Cost Price (C.P.) + Loading (Unrealized Profit Markup)

3.1 Strategic Rationale for Invoicing at Invoice Price

Maintaining Total Profit Secrecy: Prevents branch managers and local employees from knowing the exact profit margins of the company, preventing wage disputes or staff leaving to start rival firms.
Enforcing Rigid Price Uniformity: Ensures the branch sells merchandise to customers at the strictly fixed retail catalog price without unauthorized discounts.
Establishing Automated Inventory Control: Since goods are debited to the branch at selling price, the total physical sales plus closing stock at invoice price must mathematically equal the total goods dispatched. Any shortfall immediately highlights employee theft or inventory shrinkage.

3.2 Accounting Treatment of Loading (Stock Reserve Mechanism)

Under the principle of conservatism and GAAP matching rules, a company cannot recognize a profit on goods simply by shipping them from its central warehouse to its own retail branch. Profit is realized only when the goods are sold to external third-party customers. Therefore, when accounts are prepared at year-end, all artificial loading included in opening stock, goods sent, goods returned, and unsold closing stock must be systematically eliminated through counter-balancing loading entries in the Branch Account.

1. Loading on Opening Stock

Opening stock is debited to Branch A/c at Invoice Price. The loading included in it is eliminated by crediting the Branch Account with a Stock Reserve Account entry on the opposite side.
Entry: Stock Reserve A/c Dr. To Branch A/c

2. Loading on Goods Sent to Branch

Goods dispatched are debited to Branch A/c at Invoice Price. The loading is cancelled by crediting the Branch Account with a Goods Sent to Branch A/c entry.
Entry: Goods Sent to Branch A/c Dr. To Branch A/c

3. Loading on Goods Returned by Branch

Goods returned are credited to Branch A/c at Invoice Price. The loading in returns is eliminated by debiting the Branch Account with a Goods Sent to Branch A/c entry.
Entry: Branch A/c Dr. To Goods Sent to Branch A/c

4. Loading on Closing Stock

Closing stock is credited to Branch A/c at Invoice Price. The unrealized profit in unsold closing stock is eliminated by debiting the Branch Account with a Stock Reserve Account entry.
Entry: Branch A/c Dr. To Stock Reserve A/c

Mathematical Conversion: Markup on Cost vs. Markup on Invoice Price Loading Mechanics

If Loading is Rate (r) on Cost Price: → Loading Fraction on Invoice Price = r / (100 + r)

Standard Equivalencies:

20% on Cost Price (1/5 on Cost) ⇔ 20 / (100 + 20) = 20/120 = 1/6 (16.67%) on Invoice Price.
25% on Cost Price (1/4 on Cost) ⇔ 25 / (100 + 25) = 25/125 = 1/5 (20%) on Invoice Price.
33.33% on Cost Price (1/3 on Cost) ⇔ 33.33 / (100 + 33.33) = 1/4 (25%) on Invoice Price.
50% on Cost Price (1/2 on Cost) ⇔ 50 / (100 + 50) = 50/150 = 1/3 (33.33%) on Invoice Price.

3.3 Comprehensive Worked Numerical Illustration (Invoice Price System)

Let us analyze a comprehensive, realistic practical problem demonstrating the Debtors System when goods are invoiced at cost plus 25% (20% on Invoice Price), requiring loading adjustments and working notes.

∑ Worked Illustration: Branch Account at Invoice Price with Loading
Case Data: Zenith Ltd. invoices goods to its Calicut Branch at Cost + 25% (i.e., Loading = 1/5th or 20% of Invoice Price).

Transactions for the Year ended 31st March, 2024:

• Opening Stock at Branch (Invoice Price) = $30, 000∣ O p e nin g D e b t or s =$ 18,000 | Opening Petty Cash = $1,000

• Goods Sent to Branch (Invoice Price) = $150, 000∣ G oo d s R e t u r n e d b y B r an c h t oH . O . (I n v o i ce P r i ce) =$ 5,000

• Total Cash Sales at Branch = $70, 000∣ C r e d i tS a l es =$ 85,000

• Cash Collected from Debtors = $80, 000∣ D i sco u n t A l l o w e d t oD e b t or s =$ 2,000 | Bad Debts = $1,000

• H.O. paid Branch Expenses by cheque: Rent $12, 000, S a l a r i es$ 18,000 = Total $30,000

• Petty expenses paid by Branch Manager = $800 (C l os in g P e tt y C a s h =$ 1,000 − $800 =$ 200)

• Closing Stock at Branch (Invoice Price) = $40,000

STEP 1: WORKING NOTE - MEMORANDUM BRANCH DEBTORS ACCOUNT

Opening Debtors ( $18, 000) + C r e d i tS a l es ($ 85,000) = Total Dr. $103,000.

Credits = Cash Collections ( $80, 000) + D i sco u n t A l l o w e d ($ 2,000) + Bad Debts ( $1, 000) =$ 83,000.

Closing Debtors (Balancing Figure) = 103,000 −83,000 = $20,000.

STEP 2: COMPUTING LOADING ADJUSTMENTS (20% or 1/5th of Invoice Price)

• Loading on Opening Stock ( $30, 000 \times 1/5) =$ 6,000 → (Credit to Branch A/c as Stock Reserve)

• Loading on Goods Sent ( $150, 000 \times 1/5) =$ 30,000 → (Credit to Branch A/c as Goods Sent Loading)

• Loading on Goods Returned ( $5, 000 \times 1/5) =$ 1,000 → (Debit to Branch A/c as Goods Sent Loading)

• Loading on Closing Stock ( $40, 000 \times 1/5) =$ 8,000 → (Debit to Branch A/c as Stock Reserve)

STEP 3: COMPILING CALICUT BRANCH ACCOUNT (In H.O. Ledger)

DEBIT SIDE:

• To Opening Assets: Stock $30, 000 + D e b t or s$ 18,000 + Petty Cash $1, 000 =$ 49,000

• To Goods Sent to Branch (at I.P.) = $150,000

• To Bank (Rent $12, 000 + S a l a r i es$ 18,000) = $30,000

• To Goods Sent to Branch A/c (Loading on Returns) = $1,000

• To Stock Reserve A/c (Loading on Closing Stock) = $8,000

Total Debits (before profit) = $238,000

CREDIT SIDE:

• By Bank (Remittances: Cash Sales $70, 000 + D e b t or s C o l l ec t i o n s$ 80,000) = $150,000

• By Goods Sent to Branch A/c (Returns at I.P.) = $5,000

• By Stock Reserve A/c (Loading on Opening Stock) = $6,000

• By Goods Sent to Branch A/c (Loading on Goods Sent) = $30,000

• By Closing Assets: Stock $40, 000 + D e b t or s$ 20,000 + Petty Cash $200 =$ 60,200

Total Credits = $251,200

RESULT: Net Branch Profit (Credited to General P&L) = 251,200 −238,000 = $13,200.

4. The Stock and Debtors System (Comprehensive Analytical Method)

While the Debtors System is concise and easy to execute, it behaves as a "black box"—it computes the final net profit but fails to disclose the intermediate Gross Profit margin, nor does it provide a granular accounting trail for inventory wastage, pilferage, or stock discrepancies. When a dependent branch operates on a large scale, the Head Office abandons the single-account system and deploys the highly analytical Stock and Debtors System.

4.1 Core Ledger Accounts Maintained in Head Office Books

Under this system, the Head Office maintains a complete set of interlocking control accounts for each branch:

1. Branch Stock Account

Maintained strictly at Invoice Price. Functions as a perpetual inventory ledger. Debited with Opening Stock, Goods Sent, and Sales Returns. Credited with Cash Sales, Credit Sales, Goods Returned to H.O., and Normal/Abnormal Wastage. The balancing figure reveals either a Stock Surplus (Cr. > Dr.) or a Stock Shortage (Dr. > Cr.).

2. Branch Adjustment Account

The core profit-determination engine. Acts as the Gross Profit account. Credited with the loading on opening stock and goods sent. Debited with loading on goods returned, loading on closing stock, loading on stock shortages, and normal wastage. The balancing figure represents the Gross Profit or Gross Loss of the branch.

3. Branch Debtors Account

Maintained identically to a standard sales ledger control account. Tracks credit customer balances, collections, discounts, and bad debts.

4. Branch Expenses Account

Accumulates all operational expenses incurred by the branch (Rent, Salaries, Petty Cash spent, Discount Allowed, Bad Debts). The total balance is closed by transferring to the Branch Profit & Loss Account.

5. Branch Profit & Loss Account & Goods Sent to Branch Account

Branch Profit & Loss Account: Credited with Gross Profit from Branch Adjustment A/c. Debited with total expenses from Branch Expenses A/c and the Cost Price of Abnormal Stock Losses. The balancing figure is the final Net Profit / Net Loss transferred to General P&L.
Goods Sent to Branch Account: Credited with goods sent at invoice price, debited with loading transferred to Branch Adjustment A/c and returns. The remaining net balance (Cost of goods sent) is transferred to Head Office Purchases Account or Trading Account.

4.2 Accounting Treatment of Normal vs. Abnormal Loss of Stock

Parameter	Normal Stock Loss (Evaporation, Cutting, Leakage)	Abnormal Stock Loss (Fire, Theft, Burglary, Transit Accident)
Nature	Unavoidable, natural physical shrinkage inherent in trading.	Avoidable, unexpected catastrophe resulting from negligence or disaster.
Branch Stock A/c	Credit Branch Stock A/c with total Invoice Price of normal loss.	Credit Branch Stock A/c with total Invoice Price of abnormal loss.
Cost Price Portion	Treated as a trading expense; debited entirely to Branch Adjustment Account (reducing gross profit).	Transferred to Branch Profit & Loss Account (or Insurance Claim A/c if insured) as an extraordinary non-operating loss.
Loading Portion	Debited to Branch Adjustment Account.	Debited to Branch Adjustment Account (eliminating unrealized markup).

5. Accounting for Independent Branches

When a business expands into large regional or metropolitan territories, centralized bookkeeping becomes an administrative bottleneck. The Head Office grants operational and accounting autonomy to the branch, elevating it to the status of an Independent Branch.

5.1 Key Characteristics of Independent Branches

Full Double-Entry Accounting: The branch maintains a complete, independent set of accounting books (Journals, Cash Books, General Ledgers).
Local Procurement & Pricing Autonomy: The branch can purchase goods locally from third-party vendors, fix local selling prices, and incur local expenses without prior H.O. sanction.
Independent Banking: Maintains its own independent bank accounts, depositing revenues and drawing cheques independently.
Independent Trial Balance: At the close of the financial year, the branch balances all its ledger accounts and extracts its own complete, independent Trial Balance.

5.2 Reciprocal Control Accounts (The Interlocking Mechanism)

To connect the independent branch's books with the Head Office's central books, both entities maintain Reciprocal Accounts:

In Head Office Books: "[Location] Branch Account"

The Head Office treats the branch as a personal debtor/asset. The Branch Account is debited with funds or assets dispatched to the branch, and credited with remittances received from the branch. It normally carries a Debit Balance representing the H.O.'s net capital investment in the branch.

In Branch Books: "Head Office Account"

The branch treats the Head Office as its ultimate proprietor/capital account. The Head Office Account is credited with goods, assets, and capital received from H.O., and debited with remittances sent to H.O. It normally carries an equal and opposite Credit Balance.

5.3 Comparative Journal Entries in Both Sets of Books

Nature of Transaction	Journal Entry in Head Office Books	Journal Entry in Branch Books
1. Dispatch of Goods from H.O. to Branch	Branch Account Dr. To Goods Sent to Branch A/c	Goods Received from H.O. A/c Dr. To Head Office Account
2. Remittance of Cash from Branch to H.O.	Bank Account Dr. To Branch Account	Head Office Account Dr. To Bank Account
3. Purchase of Fixed Asset by Branch (Asset recorded in H.O. books)	Branch Fixed Asset A/c Dr. To Branch Account	Head Office Account Dr. To Bank / Creditors A/c
4. H.O. expenses paid by Branch on behalf of H.O.	Expenses Account Dr. To Branch Account	Head Office Account Dr. To Bank Account
5. Direct payment to H.O. creditor by Branch	Sundry Creditors A/c Dr. To Branch Account	Head Office Account Dr. To Bank Account

5.4 Inter-Branch Transactions

When multiple independent branches operate under the same corporate umbrella (e.g., Branch A in Calicut and Branch B in Cochin), one branch may occasionally transfer goods or funds directly to another branch under Head Office instructions.

Strict Accounting Rule: Branches are not permitted to open ledger accounts in the names of other branches. All inter-branch transfers must be routed exclusively through the Head Office Account in the branch books, and through the respective Branch Accounts in Head Office books.

∑ Worked Rule: Inter-Branch Transfer of Goods
Scenario: Under instructions from H.O., Calicut Branch sends goods worth $10,000 to Cochin Branch.

1. Entry in Sending Branch (Calicut) Books:

Head Office Account Dr. $10,000

To Goods Received from H.O. (or Purchases) A/c $10,000

2. Entry in Receiving Branch (Cochin) Books:

Goods Received from H.O. (or Purchases) A/c Dr. $10,000

To Head Office Account $10,000

3. Entry in Head Office Books:

Cochin Branch Account Dr. $10,000

To Calicut Branch Account $10,000

6. Year-End Reconciliation & Incorporation of Branch Accounts

Theoretically, the Debit balance of the Branch Account in the Head Office general ledger must exactly equal the Credit balance of the Head Office Account in the branch general ledger. However, at the close of the financial year on March 31st, these two reciprocal accounts almost never agree. The discrepancy arises primarily due to transactions initiated by one party before year-end that have not yet reached the other party.

6.1 Reconciling Items: Goods in Transit & Cash in Transit

Goods in Transit: Goods dispatched by the Head Office on March 28th that physically arrive at the branch warehouse on April 4th. The H.O. debited the Branch on March 28th, but the branch has made zero entry because the goods were not physically received before the year-end cutoff.
Adjusting Entry in H.O. Books:
Goods in Transit Account Dr.
To Branch Account
(Shown as an Asset on the Consolidated Balance Sheet).
Cash in Transit (Remittance in Transit): Cash or bank drafts wired by the branch on March 30th that do not credit the H.O. bank account until April 3rd. The branch debited the H.O., but H.O. has recorded nothing.
Adjusting Entry in H.O. Books:
Cash in Transit Account Dr.
To Branch Account
(Shown as a Current Asset on the Consolidated Balance Sheet).

6.2 Methods of Incorporating Branch Results into Head Office Books

To compile the master financial statements of the entire corporation, the Head Office must incorporate the independent branch's trial balance into its own general ledger using one of two methods:

Method 1: Incorporating Branch Profit / Loss Only

The branch prepares its own internal Trading and Profit & Loss Account to determine its Net Profit. The H.O. passes a single summary entry in its books:
Branch Account Dr.
To General Profit & Loss Account
(For Branch Net Profit). Branch assets and liabilities are not merged into H.O. ledgers; only shown on the consolidated balance sheet via memorandum schedule.

Method 2: Full Detailed Incorporation

The H.O. incorporates every single item from the branch trial balance into its own ledger by passing comprehensive formal journal entries for Branch Trading debits, Branch Trading credits, Branch P&L expenses, Branch Assets, and Branch Liabilities, creating a 100% unified accounting record.

Master Journal Entries: Full Branch Incorporation In Head Office Books

      1. Branch Trading Account Dr.

          To Branch Account

      (Being Opening Stock, Purchases, Direct Wages, etc., incorporated)

      2. Branch Account Dr.

          To Branch Trading Account

      (Being Sales and Closing Stock incorporated)

      3. Branch P&L Account Dr.

          To Branch Account

      (Being Branch Salaries, Rent, Overheads, Bad Debts incorporated)

      4. Individual Branch Assets A/c (Plant, Debtors, Cash) Dr.

          To Branch Account

      (Being all closing branch assets incorporated into H.O. ledger)

      5. Branch Account Dr.

          To Individual Branch Liabilities A/c (Creditors, O/s Exp)

      (Being all closing branch liabilities incorporated into H.O. ledger)