__1.The appropriate journal entry in the accounting records of the home office to record a Br 100,000 cash remittance in transit from the branch at the end of the accounting period is:

A.Cash..................100,000

Cash in transit..........................100,000

B.Cash.............................100,000

Home office ...................................100,000

C.Cash in transit.........................100,000

Cash ............................................100,000

D.Cash in transit ..................100,000

Investment in branch.........................100, 000

E.None

__2.ABC Corp. establishes a branch in a nearby town and transfers to the branch include cash Br.65, 000, Office supplies Br.2, 000, and Furniture Br.23, 000. The entry to record this transfer on the books of the branch would include:

A.A debit of Br.90, 000 to the Home Office account.

B.A credit of Br.90, 000 to the Investment in Branch account.

C.A debit of Br.90, 000 to the Investment in Branch account.

D.A credit of Br.90, 000 to the Home Office account.

E.None

__3.The home office marks up merchandise shipped to the branch at 25 percent of billed price.If merchandise costing Br.30, 000 is shipped to the branch, which of the following set of account balances will result assume that the firm use perpetual inventory system?

A.Merchandise inventory :Br.40,000; merchandise inventory to Branch: Br.30,000; Overvaluation of Branch Inventory: Br.10,000

B.Merchandise inventory :: Br.30,000; merchandise inventory to Branch: Br.22,500; Overvaluation of Branch Inventory: Br.7,500

C.Merchandise inventory :: Br.40,000; merchandise inventory to Branch: Br.32,500; Overvaluation of Branch Inventory: Br.7,500

D.Merchandise inventory : Br.37,500; merchandise inventory to Branch: Br.30,000; Overvaluation of Branch Inventory: Br.7,500

E.None

__4.If the branch pays the freight cost on merchandise shipments from the home office,

A.The home office will increase its Investment in Branch account.

B.The home office will decrease its Investment in Branch account.

C.There is no effect on either the Investment in Branch or Home Office accounts.

D.The branch will decrease its Home Office account.

E.None

__5.In reconciling the reciprocal accounts between a home office and a branch, adjustments must be made to bring these accounts into balance before eliminations can be made.Differences in these balances can be due to all of the following except:

A.Shipments in transit at the end of the period which are recorded by the home office but not by the branch.

B.Sales to customers by the home office at the end of the accounting period which were not recorded by the branch.

C.Remittances from the branch mailed on the last day of an accounting period which are not recorded by the home office.

D.Collections of home office receivables by the branch close to the end of a period which is not recorded by the home office.

E.None

__6.Which of the following ledger accounts is displayed in the combined financial statements for a home office and branch?

A.Investment in BranchB. Dividends DeclaredC. Home Office accountD. Allowance for Overvaluation of Inventories: BranchE. None