The difference between the closure of the books of a branch and those of a separate company is that?

Assessment: JAMB UTME - Principles of Accounts - 1998 Subject: Financial Accounting

Question 1 Report

The difference between the closure of the books of a branch and those of a separate company is that?
Answer Details
The difference between the closure of the books of a branch and those of a separate company is that there is no retained earnings account on the branch's books. When the books of a branch are closed, the revenue and expenses account is closed to the branch current account, while in a separate company, the revenue and expenses account is not closed to the home office current account. In other words, a branch is considered a part of the parent company, and its financial records are consolidated with those of the parent company, whereas a separate company operates independently and maintains its own financial records.
Read lesson note on Branch Accounts (JAMB)
Read lesson note on Company Accounts (WAEC)
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