Branch & Departmental Accounting MCQ Quiz with Detailed Solutions

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Departmental & Branch Accounting Quiz (Q11–Q20)

MCQs with detailed solutions

Instructions

Click "Show Solution" for each question to reveal the correct answer and a concise explanation.

Q11

Departmental Accounting facilitates

A Comparison of trading results

B Planning and Control

C Evaluate Departmental performance

D All of the above

Correct: D

Explanation: Departmental accounting records results for each department separately. This enables comparison of trading results, supports planning and control by highlighting variances, and helps evaluate departmental performance for profitability and efficiency.

Q12

In departmental accounting, where separate books are kept for each department, known as

A Independent Accounting

B Columnar Accounting

C Consolidated Accounting

D Advanced Accounting

Correct: A

Explanation: Independent accounting refers to each department maintaining its own separate books. Columnar accounting, by contrast, uses departmental columns within a single set of books rather than separate ledgers.

Q13

Expenses which cannot be reasonably allocated to any particular department are taken into

A Debtors Accounts

B Cash Book

C Balance Sheet

D General P&L Account

Correct: D

Explanation: Common or unallocable expenses (e.g., head office administration, general insurance) are charged to the General Profit & Loss Account because they benefit the business as a whole and cannot be fairly apportioned to individual departments.

Q14

A branch which does not maintain its own books of accounts is

A Independent Branch

B Local Branch

C Foreign Branch

D Dependent Branch

Correct: D

Explanation: A dependent branch does not maintain its own books; the head office keeps the accounting records. Dependent branches send periodic summaries or statements to the head office for consolidation.

Q15

All expenses such as rent, salary etc. are paid by H.O. in case of

A Independent Branch

B Dependent Branch

C Local Branch

D Foreign Branch

Correct: B

Explanation: In a dependent branch system, the head office typically pays branch expenses (rent, salaries, utilities) and records them centrally because the branch does not maintain independent accounting records.

Q16

Goods supplied by the H.O. to dependent branches are at

A Cost Price

B Cost or Invoice Price

C Market Price

D Invoice Price

Correct: B

Explanation: Head offices may supply goods to dependent branches at cost or at an invoice price (which may include a markup). Using cost or invoice price helps in internal control and measuring branch profitability.

Q17

Under Debtors system depreciation on fixed assets is

A Credited to Branch Account

B Debited to Branch Account

C Not shown in Branch Account

D Shown in Debtors Account

Correct: B

Explanation: Under the debtors system (where branch transactions are recorded through head office books), depreciation on branch fixed assets is treated as an expense and debited to the Branch Account to reflect reduction in asset value and branch profitability.

Q18

In Single Entry System Net Worth Method is also known as

A Mercantile System

B Double Entry System

C Accrual System

D Statement of Affairs Method

Correct: D

Explanation: The Net Worth Method in single entry accounting is commonly called the Statement of Affairs Method because it uses a statement of affairs (similar to a balance sheet) to determine opening and closing capital and thereby compute profit or loss.

Q19

Positive difference between opening net worth & closing net worth is

A Capital Balance

B Cash Balance

C Profit

D Loss

Correct: C

Explanation: If closing net worth exceeds opening net worth, the positive difference represents profit earned during the period. A negative difference would indicate a loss.

Q20

In single entry system a statement of affairs is just like

A Balance Sheet

B Profit & Loss Statement

C Cash Book

D Trading Account

Correct: A

Explanation: A statement of affairs resembles a balance sheet: it lists assets and liabilities to determine capital (net worth). In single entry systems it substitutes for a formal balance sheet prepared under double entry bookkeeping.

Answer Key Summary

Q11: D; Q12: A; Q13: D; Q14: D; Q15: B; Q16: B; Q17: B; Q18: D; Q19: C; Q20: A

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