Introduction to Consignment Accounting: Valuation of Goods-in-Transit

The video tutorial explains the valuation of stock, focusing on the concept of goods in transit. It covers how goods sent by a consigner but not yet received by the consignee are treated in stock valuation. The tutorial provides a detailed example involving Mr. Aditya, illustrating the calculation of closing stock by considering goods on hand and in transit. It emphasizes the importance of including consigner's expenses and the correct handling of goods in transit to determine the total closing stock value.

What is the term used for goods that have been dispatched by the consigner but not yet received by the consignee?

• Goods on Hand

• Goods in Transit

• Abnormal Loss

• Consignment Stock

Why are goods in transit not included in the consignee's stock?

• They are damaged

• They are still owned by the consigner

• They are lost

• They are already sold

In the context of stock valuation, what is added to the consigner's expenses?

• Abnormal loss

• Normal loss

• Consignee's non-recurring expenses

• Consignee's recurring expenses

How many units were still in transit in Mr. Aditya's example?

• 100 units

• 200 units

• 300 units

• 400 units

What was the total value of the goods in transit in Mr. Aditya's example?

• 7,000

• 6,000

• 5,000

• 4,000

What is the purpose of adding consignees' non-recurring expenses in stock valuation?

• To account for goods sold

• To determine the selling price

• To cover the cost of goods reaching the godown

• To calculate abnormal loss

What is the final value of the closing stock on hand in Mr. Aditya's example?

• 60,000

• 65,000

• 70,000

• 75,000

What is the total closing stock value including goods in transit in Mr. Aditya's example?

• 65,000

• 80,000

• 70,000

• 75,000

Why is it important to consider goods in transit in stock valuation?

• They impact the total closing stock value

• They are already sold

• They affect the consigner's ownership

• They are part of the consignee's stock

What should be done if goods in transit are not specified in a question?

• Consider them as normal loss

• Include them in the stock valuation

• Exclude them from the stock valuation

• Consider them as abnormal loss