1. Slide 1.1 Frank Wood and Alan Sangster, Business Accounting, Volume 2, 11 th Edition, © Pearson Education Limited 2008 Accounting records and branches There are two commonly used methods for recording transactions for branches of an organisation: The headquarters (or ‘head office’) keeps all the accounting records, or; Each branch has its own full accounting system.

2. Slide 1.2 Frank Wood and Alan Sangster, Business Accounting, Volume 2, 11 th Edition, © Pearson Education Limited 2008 If head office maintains all accounting records The ledgers are used for three main purposes : To record transactions showing changes in assets, liabilities and capital; To ascertain the profitability of each branch; To check whether anyone at the branches is stealing goods or cash.

3. Slide 1.3 Frank Wood and Alan Sangster, Business Accounting, Volume 2, 11 th Edition, © Pearson Education Limited 2008 Allowances for deficiencies In every business, there will be: Wastage of goods – goods may be damaged or broken; Stealing by customers; especially in the retail business; Thefts by employees.

4. Slide 1.4 Frank Wood and Alan Sangster, Business Accounting, Volume 2, 11 th Edition, © Pearson Education Limited 2008 IAS 21: The effects of changes in foreign exchange rates Under IAS 21, at the balance sheet date: Foreign currency monetary items are translated at the ‘closing rate’ (i.e. the exchange rate on the balance sheet date); Non-monetary items measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction; Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate at the date when the fair value was determined.