Accounting for consignment
[Explanations]
Learning objectives:
- What is consignment? Enlist advantages and disadvantages of consignment form of business.
- What is proforma invoice? Who prepares a proforma invoice in consignment?
- What is an account sales? What purpose does an account sales serve?
- What is the difference between cost price method and invoice price method of sending goods on consignment?
- Make journal entries and prepare necessary ledger accounts in the books of consignor as well as consignee.
- How the stock on consignment is calculated and treated?
- How would you explain the terms recurring and non-recurring expenses?
- Compute the value of normal and abnormal loss in consignment.
- What is the treatment of normal and abnormal loss in consignment?
- What are del credere commission and overriding commission? In which situations the two types of commission are granted to consignee?
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