In the head office ledger, the value of goods sent to the branch are

In the head office ledger, the value of goods sent to the branch are

Answer Details

In the head office ledger, the value of goods sent to the branch are debited to the head office current account. This is because when goods are sent from the head office to a branch, the head office is effectively sending assets (the goods) to the branch. In a double entry system of accounting, when assets are transferred from one entity to another, the entity sending the assets would debit its own assets account, and the entity receiving the assets would credit its own assets account. In this case, the head office is sending goods to the branch, so it would debit its own assets account (i.e., debiting the head office current account), and the branch would credit its own assets account (i.e., crediting the branch current account). So, in summary, in the head office ledger, the value of goods sent to the branch are debited to the head office current account.