WAEC Accounting 2019 Theory — Question 2

Model answer

(a) Closing entries: These are balancing entries in the journal accounts which are transferred to the income and expenditure account or the balance sheet. (b) A branch is a division of an organization which is located in another location apart from its headquarters or other branches while a department is a section of a single organization divided into units operating under a single roof. Example of a branch is a bank while example of a department is a departmental stores or finance department in an organization. (c) Reasons for the preparation of a branch account: i. To determine branch profit and for loss. ii. To reconcile branch and head office account. iii. To prevent fraud at the branch. iv. To know branch performances.