Consignment Accounting Problem Solving: Solving a Case Study with Versus Deviant and Harry

The video tutorial covers consignment accounting, focusing on transactions between a consignor and consignee. It explains the invoicing process, calculation of sales, and various commissions. The tutorial also details the preparation of consignment accounts, including the valuation of closing stock and reversing loading charges. Key concepts include understanding invoice pricing, handling consignee expenses, and calculating commissions on sales.

What is the primary role of a consignee in consignment accounting?

• To provide loans to the consigner

• To manufacture goods for the consigner

• To sell goods on behalf of the consigner

• To purchase goods from the consigner

How is the invoice price calculated if the cost price is $250 and the loading is 20%?

• $320

• $300

• $250

• $270

What is the significance of reversing the loading in consignment accounting?

• To adjust the cost to the actual cost price

• To calculate the selling price

• To increase the profit margin

• To determine the commission

Which type of commission is given for the risk of bad debts?

• Overriding Commission

• Normal Commission

• Surplus Commission

• Del Credere Commission

What is the purpose of calculating a stock reserve?

• To adjust the closing stock to its cost price

• To determine the sales commission

• To increase the value of closing stock

• To calculate the profit margin

How is the closing stock valued in consignment accounting?

• At the cost price

• At the selling price

• At the market price

• At the invoice price

What is the effect of a surplus price on commission calculation?

• It decreases the commission

• It has no effect on commission

• It increases the commission

• It is deducted from the commission

Which of the following is NOT a type of commission discussed?

• Fixed Commission

• Overriding Commission

• Del Credere Commission

• Normal Commission

What is the final step in consignment accounting before closing the account?

• Calculating the invoice price

• Reversing the loading

• Calculating the commission

• Checking for closing stock

What is the primary reason for preparing a consignment account?

• To determine the market value of goods

• To calculate the consignee's profit

• To track the consigner's expenses

• To record transactions between consigner and consignee