Consignment Accounts Quiz

What is a consignment account primarily used for?

• Managing personal expenses

• Recording transactions related to goods sent on consignment

• Maintaining a company's payroll

• Tracking investments

In consignment accounting, what is considered a normal loss?

• Loss due to theft

• Loss due to fire

• Expected loss due to handling and transportation

• Loss due to mismanagement

How is commission typically calculated in a consignment account?

• As a percentage of the cost price

• As a fixed amount per sale

• As a percentage of the sales price

• As a percentage of the total expenses

Which of the following is an abnormal loss in consignment accounting?

• Goods damaged in transit

• Spoilage due to natural causes

• Goods destroyed by a sudden flood

• Normal wear and tear

What is the consignee's responsibility in a consignment relationship?

• To purchase the goods from the consignor

• To sell the goods on behalf of the consignor

• To manufacture the goods

• To insure the goods against all risks

When recording consignment expenses, which of the following would not typically be included?

• Freight charges

• Advertising costs

• Office supplies for consignee

• Insurance costs

On receiving goods on consignment, the consignee records the goods as a:

• Purchase

• Sale

• Inventory

• Liability

How are abnormal losses treated in the consignment account?

• Deducted from the total sales

• Charged to the consignee's account

• Added to the consignor's expenses

• Written off as bad debts

What document is sent by the consignor to the consignee to inform about the goods sent?

• Invoice

• Consignment note

• Bill of lading

• Purchase order

Which account is credited when the consignee sells the consigned goods?

• Cash account

• Consignment account

• Consignor's account

• Sales account