Consignment Accounting: Advanced Concept of Consignee's Security Money

The video tutorial covers the basics and advanced concepts of consignment accounting, focusing on the treatment of advances received from consignees. It explains how advances can be treated as security money and the implications of this treatment on accounting entries. The tutorial uses a detailed example to illustrate the process of recording transactions, adjusting advances, and handling unsold stock. It emphasizes the importance of understanding whether advances are treated as security money and how this affects the consignment account.

What is the percentage of advance taken from the consignee in the example provided?

• 60%

• 80%

• 50%

• 70%

When the advance is not treated as security money, what is the entry for sales in the consignee's account?

• Goods consignment account debit to goods sent on consignment

• Bank account debit to consignee account

• Consignee account debit to consignment account

• Consignment account debit to consignee account

What happens to the advance money when it is not treated as security money?

• It is used to purchase more goods

• It is adjusted against the total dues

• It is carried forward to the next period

• It is refunded to the consignee

What is the risk for the consigner if the advance is not treated as security money?

• The consigner might lose the goods

• The consigner has no security for unsold goods

• The consignee might return the goods

• The consignee might not sell any goods

How is the advance treated when it is considered as security money?

• It is used to pay for expenses

• It is fully adjusted against sales

• It is partially carried forward for unsold goods

• It is refunded to the consignee

What is the proportionate amount of advance carried forward for unsold goods?

• 10,000

• 15,000

• 20,000

• 25,000

In the case of security money, what becomes the opening balance for the next period?

• The total sales amount

• The total expenses incurred

• The proportionate advance for unsold goods

• The commission charged

What should you check in a question to determine if advance is treated as security money?

• The total sales amount

• The consignee's expenses

• The word 'security' in the question

• The percentage of advance

What is the total amount remitted by the consignee when advance is treated as security money?

• 54,600

• 34,600

• 74,600

• 94,600

Why is it important to know if advance money is treated as security money?

• To determine the consignee's commission

• To understand the accounting entries

• To calculate the total sales

• To decide the goods to be sent