AFAR- HOBA

If the home office receives debit memo from the branch, the home office shall record it in its separate statement of financial position by

• Increasing the investment in branch account

• Decreasing the investment in branch account

• Disclosure only

• None of the above

If the branch receives credit memo from the home office, the branch shall record it in its separate statement of financial position by

• Increasing the home office account

• Crediting the home office account

• Debiting the home office account

• Disclosure

Which of the following transactions will increase the home office account in the branch’s separate statement of financial position?

• Net loss of the branch

• Collection by the home office of branch’s receivable

• Debit memo received from the home office

• Payment by the branch of home office’s liability

Which of the following transactions will decrease the investment in branch’s account in the home office’s separate statement of financial position?

• Net income of the branch

• Payment of branch’s liability by the home office

• Credit memo received from the branch

• Return by branch to home office of merchandise shipped

Which of the following reconciling transactions will require credit to home office current account in Branch A’s book for the adjustment?

• Collection by Branch A of Branch B’s accounts receivable

• Payment by branch A of home office’s accounts payable

• Credit memo received by branch A from home office

• Reshipment of goods received by branch A to branch B

The net adjustment in the Home Office books related to Marikina branch current account is

• 55,700 credit

• 75,700 credit

• 86,200 credit

• 55,700 debit

The net adjustment in Marikina’s books related to the Home Office Account is

• 20,950 debit

• 21,130 debit

• 21,130 credit

• 21,040 credit

What if it would have only costed the main office P14,000 to ship the goods intended for Bacoor branch directly to its location, how much is the loss to be recognized by the main office?

• 21,000

• 12,000

• 10,000

• 0

What if it would have costed the main office P30,000 to ship the goods intended for Bacoor branch directly to its location, how much is the debit to freight-in in the Bacoor branch books?

• 11,000

• 15,000

• 26,000

• 30,000

What is the increase in the Allowance for Overvaluation before adjustment during the year?

• 56,000

• 77,000

• 70,000

• 126,000