Consignment Accounting Problem Solving: Accounting for Consignment Sales and Abnormal Loss

The video tutorial covers consignment accounting, focusing on transactions involving Charlene Traders and Zing. It explains the handling of abnormal losses due to fire, insurance claims, and the calculation of commissions on sales. The tutorial also details the valuation of closing stock using cost and net realizable value (NRV) methods. Finally, it discusses the preparation of final accounts and assumptions made during the process.

What is the role of Charlene Traders in the consignment process?

• Seller

• Buyer

• Consigner

• Consignee

How many sarees were sent on consignment by Charlene Traders?

• 5000

• 3000

• 2000

• 1000

What is the ordinary commission percentage on total sales?

• 10%

• 15%

• 5%

• 20%

Who bears the loss if a customer fails to pay for goods sold on credit?

• Insurance Company

• Consigner

• Both Consignee and Consigner

• Consignee

What is the entry for recording abnormal loss due to fire?

• Abnormal Loss Account Debit to Cash Account

• Abnormal Loss Account Debit to Consignment Account

• Consignment Account Debit to Abnormal Loss Account

• Cash Account Debit to Abnormal Loss Account

How much was received from the insurance company for the abnormal loss?

• 10,000

• 20,000

• 15,000

• 5,000

What is the market value reduction percentage for the closing stock of sarees?

• 10%

• 20%

• 5%

• 15%

Which value is used for recording closing stock: cost or net realizable value?

• Higher of cost or NRV

• Only NRV

• Lower of cost or NRV

• Only cost

What was the profit on consignment for Charlene Traders?

• 96,350

• 100,000

• 50,000

• 75,000

What is the final balance carried forward in the Zing account?

• 11,750

• 10,000

• 20,000

• 15,000