Introduction to Consignment Accounting: Basic Journal Entries

The video tutorial covers the essential aspects of consignment accounting, focusing on journal entries, ledger accounts, and the roles of consigner and consignee. It explains the necessary steps for recording transactions, handling expenses, and determining profit or loss. The tutorial also discusses the final settlement process and the closure of ledger accounts, providing a comprehensive understanding of consignment accounting practices.

What is the primary purpose of preparing a consignment account in the books of the consigner?

• To record sales transactions

• To track the inventory levels

• To determine profit or loss on consignment

• To manage cash flow

Which account is debited when goods are sent on consignment?

• Consignment Account

• Consignee Account

• Goods Sent on Consignment Account

• Cash Account

How are consignor's expenses recorded in the consignment accounting?

• As a credit to the consignment account

• As a debit to the consignee account

• As a debit to the consignment account

• As a credit to the cash account

What is the journal entry for advances given by the consignee to the consigner in the form of cash?

• Consignee Account Debit, Cash Account Credit

• Cash Account Debit, Consignee Account Credit

• Cash Account Debit, Consigner Account Credit

• Consigner Account Debit, Cash Account Credit

In consignment accounting, how are consignee's expenses treated?

• Debited to the consignee's personal account

• Credited to the consignment account

• Credited to the consignee's personal account

• Debited to the consignment account

What is the entry for sales made by the consignee?

• Sales Account Debit, Consignment Account Credit

• Cash Account Debit, Sales Account Credit

• Consignment Account Debit, Cash Account Credit

• Cash Account Debit, Consignment Account Credit

How is commission treated in the books of the consignee?

• As an asset

• As a liability

• As an income

• As an expense

What is the entry for closing stock in consignment accounting?

• Trading Account Debit, Stock Account Credit

• Stock Account Debit, Trading Account Credit

• Consignment Account Debit, Stock Account Credit

• Stock Account Debit, Consignment Account Credit

When is the consignment account closed and transferred to the PNL account?

• When goods are sent on consignment

• At the end of the accounting period

• When the consignee makes a sale

• At the end of each month

What happens to the balance in the Commission account at the end of the period?

• It is credited to the consignment account

• It is transferred to the PNL account

• It is carried forward to the next period

• It is written off as an expense