how branch accounting works
in branch accounting each branch defined as a geographically separate operating unit is treated as an individual profit or cost center its branch has its own account in that account it records such items as inventory accounts receivable wages equipment expenses such as rent and insurance and petty cash like any double entry bookkeeping system the ledger keeps a tally of assets and liabilities debits and credits and ultimately profits and losses for a set period technically speaking in bookkeeping terms the branch account is a temporary or nominal ledger account it lasts for a designated accounting period at the period s end the branch tallies up its figures and arrives at ending balances which are then transferred to the appropriate head office or head department accounts the branch account is left with a zero balance until the accounting process begins all over again with the next accounting period or cycle 1branch accounting methodsthere are several different methods for keeping branch accounts depending on the nature and complexity of the business and the operational autonomy of the branch the most common include 2