What are the five objectives of branch accounting?

BRANCH ACCOUNTING

Branch

: A branch is a separate segment of a business. In order to increase the sales, business houses arerequires to market their products over a larger territory and may generally split their business intocertain divisions or parts. These various parts or divisions may be located in different part of the samecity or in different cities of the same country or in different countries in the world. These are known asbranches. The head office controls the activities of various branches.

Branch accounting

: Branch accounting is the process through which the accounting system of a branchis maintained.

Objectives of branch accounting

: The main objects of branch accounts are dependent on the nature of the business and specific need of a particular branch. The objectives of keeping the branch accountsacceptable to all businesses are as follows.1.

To know the profit or loss of each branch separately.2.

To ascertain the financial position of each branch separately on a particular date.3.

To know the cash & goods requirements of the various branches.4.

To evaluate the progress and performances of each branch5.

To calculate commission for payment to the managers, if based on profits of branch.6.

To give concrete suggestions for the improvement in the working of the various branches.7.

To meet the requirements of specific enactments as all branches of a company must keep theaccounts for audit purpose