Which of the following statements is incorrect in regard to the accounting for branch inventory?

a.

The branch inventory account serves the same purpose as the trading account. When balanced at the end of the accounting period, the balance on the account represents the gross profit/loss that the branch made.

b.

Branches can be managed as dependent or independent units, each with its own distinct accounting requirements.

c.

The gross profit/loss is the result of the difference between the price at which inventory is received (from head office) and the price at which inventory is sold by the branch. This profit/loss is transferred to the branch expense account.

d.

When dealing with a dependent branch and the accounting functions of the branch are performed by the main branch of the entity (head office).