When you have a branch in a different state, then how you will prepare accounts for branch ?
A head office and branch office accounts must be separated however at the year end and for assessment purpose, the branch Accounts are required to be incorporated into the Head Office Account.
A branch is required to issue Form F towards stock transfer from HO to Branch
First of all you must understand what is a branch. A branch is a distinct entity from its Head Office having separate TIN CST number. It may or may not have separate bank accounts.The head office and Branch accounting transactions are required to be recorded separately and you can’t club both the transactions.
Suppose a branch office incur an expenses of Rs. 5000 towards consultancy fees to an advocate and the same is being paid by the Head office bank account, then the entry will be made as per below :
In the books of branch Account
Dr. Consultancy Fees Expenses Rs. 5000
Cr M/s. ABC & co. Rs. 5000
(Being consultancy fees credited to supplier’s Account)
Now on payment of this amount from the bank Account of HO
Dr. M/s. ABC & Co. Rs. 5000
Cr. Head Office Account Rs. 5000
(Being amount paid to supplier from the HO Bank Account)
In the books of Head office only one entry as per below will be made
DR. Branch Account Rs. 5000
Cr. Bank Account Rs. 5000
(Being Amount paid on behalf of Branch to M/s………)
In tally, you have to create a branch account under the group branch/Division Accounts as shown below for creating a branch for Red Express Mumbai branch account
Similarly in the books of Branch Accounts you can group the head office under branch /divisions as mentioned above.
Branch stock transfers are subject to Form no F I will write in future about how to record inter branch transfer accounting
Do let me know if you have some specific query