As the statements for head office all pass through the accountant's hands, it will be proper to describe them while dealing with this post.

The basic statement is the balance sheet. It may be required four times a month, and is certain to be required at least twice a month. The balance sheet shows the balances of all the general ledger accounts, some of them, such as the cash collateral accounts, being bulked in one total. It informs the general manager of the condition of the branch from week to week, or fortnight to fortnight. A number of the other statements are supplementary to the balance sheet. It is not sufficient merely to show the balance in every account in the general ledger, in the successive balance sheets. In some cases the head office demands to know about all the items passed through which have effected the change, if any, in the balance shown in the preceding statement. Various statements are devised to give this information.

The balance sheet of a branch bank is, like any other balance sheet, an exhibition of assets and liabilities. By means of the balance sheet the position of each branch is set out exactly the same as if it were an independent office. The debit balances shown in the general ledger -in other words, the assets-go on the left side, and the credit balances, or liabilities, go on the right side. Substantially, the items on both sides are made up as follows:Assets.

Net balance due by other branches (if branch supplies capital to them).

Cash (with specification).

Loans and discounts (subdivided into classes).

Past due debts.

Collateral notes on hand.

Due by New York and other correspondents.

Due by other banks.

Premises.

Office furniture and safe.

These are totalled, and underneath are put the fictitious accounts, or profit and loss accounts, showing debit balances, as follows:Charges account, representing salaries and other expenses.

Interest paid on deposits.

Liabilities.

Net balance due to other branches (if branch borrows capital from them).

Deposits (subdivided into classes).

Cash collateral accounts.

Due to other banks.

Due to New York or other correspondents.

Collateral accounts.

These also are totalled, and beneath them are placed the fictitious accounts, with credit balances, viz., Discount and Interest Received, Commission, etc.

Accounts With Branches

As might be expected, the accounts with the branches necessitate a good deal of book-keeping and a number of statements. There are two methods in vogue. One is for the branch to have in its general ledger an account for each one of the other branches with which it has transactions. It is not necessary to pass all the debits and credits each day through the general ledger. A supplementary book can be used, the branches affected being arranged each day in alphabetical order. The items pertaining to each are gathered together under the proper heading, and the total of the debits and the total of the credits for each branch carried into its account in the general ledger at the close of the day.

The other method is called the "head office system." Under it the branch carries only one account in the general ledger, styled "Head Office Account." The record of the dealings with the branches is kept in a supplementary book, and the grand total of the debits and of the credits posted each day.