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Inter-branch transactions (between two branches of same HO) are recorded:
AAs external sales/purchases
BThrough HO (debit one branch, credit another)
CNot recorded at all
DOnly at year-end as adjustment
Answer & Solution
Correct answer: B. Through HO (debit one branch, credit another)
1. Step 1: Inter-branch transactions are routed via HO to maintain centralised control.
2. Step 2: HO debits the receiving branch, credits the sending branch.
3. Step 3: Hence (B).
_Source: ICAI BoS CA Inter Paper 1, Ch 15 "Accounting for Branches including Foreign Branches"_