Discussion
Which of the following statement is incorrect in relation to Branch accounting
Answer: A
The incorrect statement is 'A branch is a separate legal entity'. A branch is only a part of the same business as its head office: it has no legal existence of its own, so the head office is legally responsible for its contracts and debts, and the accounts of the branch are ultimately merged into those of the head office. The other statements are correct. Branches are controlled by the head office, an organisation can open a branch in its home country or abroad, and branches are opened by profit-making concerns such as departmental stores and hotels as well as by non-profit bodies such as charitable institutions.
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