RECONCILIATION OF HOME OFFICE AND BRANCH ACCOUNTS
Reciprocity between home office and branch accounts will not exist at year-end if errors have been
made in recording reciprocal transactions either on the home office or the branch books, or if transactions
have been recorded on one set of books but not on the other. The approach for reconciling
home office and branch accounts at year-end is similar to the approach used for bank reconciliations.
A home office/branch reconciliation is illustrated in Exhibit 10-5 for Empire Corporation’s
home office and its Rochester branch at December 2006 according to the following assumptions:
1. Balances on December 31, 2006: Home office account (branch books), $452,300;
Rochester branch account (home office books), $492,000.
2. The Rochester branch sent a check for $12,000 cash to the home office on
December 31, 2006. The home office did not receive the check until January 4,
2007.
EXHIBIT 10-