Common Mistakes in Consignment Accounting

The video tutorial discusses common mistakes in consignment accounting, emphasizing the importance of correct ledger entries, handling consignee's commission, and accurately recording credit sales. It also covers valuing closing stock, reversing loading on invoice prices, and the significance of practicing journal entries to avoid errors and improve exam performance.

What is the correct ledger entry for recording freight and insurance paid by the consignor?

• Consignment account credit to cash or bank account

• Cash or bank account debit to expenses account

• Consignment account debit to cash or bank account

• Expenses account debit to cash or bank account

When recording sales made by the consignee, which account should be debited?

• Consignment account

• Cash account

• Consignee account

• Sales account

What should you do to avoid forgetting to account for consignee's commission?

• Calculate it only on cash sales

• Ignore it if not mentioned in the question

• Mark unsolved items while reading

• Solve it immediately after reading

If nothing is specified, on what basis should ordinary commission be calculated?

• Cash sales only

• Credit sales only

• Total sales

• Surplus price realized

In the absence of del-credere commission, who is responsible for collecting from debtors?

• Consignee

• Consignor

• Both consignee and consignor

• Neither consignee nor consignor

What should be avoided when valuing closing stock on consignment?

• Excluding normal loss quantity

• Including selling expenses

• Excluding direct expenses

• Including godown rent

What is a common error when goods are sent at invoice price?

• Ignoring direct expenses

• Not reversing the loading

• Reversing the loading

• Calculating loading on cost only