0I. Multiple Choice Questions:
1. Which of these is/are recurring (indirect expenses)?
(a) Transit insurance and freight
(b) Octroi
(c) Advertisement
(d) Godown rent and insurance
2.X sends out goods to Y, costing Rs.1,50,000. Goods are to be sold at +33 1/3% of sale. The consignor asked consignee to pay an advance for an amount equivalent to 60% of sales value. The amount of advance will be
(a) 1,20,000
(b) 1,35,000
(c) 1,50,000
(d) None
3.Goods of the invoice value of Rs.2,40,000 sent outto consignee at 20% profit on cost the loading amount will be
(a) 40,000
(b) 48,000
(c) 50,000
(d) None
4.X of Mumbai sends out certain goods at cost +25%. Invoice value of the goods is Rs 2,00,000. 4/5thof the goods were sold by consignee at Rs 1,76,000. Commission 2% upto invoice value and 10% of any surplus above invoice. The amount of commission will be.
(a) 4800
(b) 5200
(c) 3200
(d) 1600
II. Fill in the blanks:
1. The person who sends the goods for sale on fixed commission basis is ______.
2.When the consignor sends goods to consignee he prepares a ________.
3.Delcredere commission is allowed to cover the risk of _________.
4.Where goods are sent on consignment, credit is given to _______ in the books of consignor.
5.Stock reserve is created to adjust ___________.
6.Extra commission given to the consignee, for making him responsible for bad debts this extra commission is known as __________.
III. True or false:
1.Goods sent on consignment account is of the nature of real account
2.Goods valued at invoice price refers to valued at lower price than its original cost
3.Balance in consignment account shows profit and loss on consignment
4.Profit and loss on consignment is retained / borne by consignor
5.The details contained in account sales are unsold stock left with the consignee
IV. Practical Questions:
Q.1 From the following particulars ascertains the value of unsold stock on Consignment.
Goods sent (1,000 kgs.) Rs. 20,000.
Consignor’s expenses Rs. 4,000.
Consignees non-recurring expenses Rs. 3,000.
Sold (800 kgs.) Rs. 40,000.
Loss due to natural wastage (100 kgs).
Q.2Mr. X, the consignor, consigned goods to Mr. Y 100 Radio sets valued Rs. 50,000. This was made by adding 25% on cost. Mr. X paid Rs. 5,000 for freight and insurance.
Mr. Y received all goods in good condition. He incurred Rs. 4,000 for freight and miscellaneous expenses and Rs. 3,000 for godown rent. He sold 60 sets for Rs. 50,000. Show the necessary ledger account in the books of Mr. X assuming that Mr. Y was entitled to an ordinary Commission of 10% on sales and 5% Del Credere Commission on sales. He also reported that Rs. 1,000 were provide bad.
