Consignment Accounts Quiz

What is the role of the consignor in a consignment arrangement?

• To manage the expenses of the consignee

• To collect payments from customers

• To send goods to the consignee for sale

• To sell goods to customers

What does the consignee do with the goods received on consignment?

• Records the goods as a liability

• Returns the goods to the consignor immediately

• Sells the goods and collects money

• Keeps the goods as their own

Which type of commission is a fixed percentage of sales made by the consignee?

• Del Credere Commission

• Ordinary Commission

• Performance Commission

• Overriding Commission

What is a Pro-forma invoice?

• A statement of sales made by the consignee

• A report of expenses incurred by the consignee

• An invoice for goods sold to customers

• A document detailing goods sent to the consignee

What is the primary risk borne by the consignor?

• Commission paid to the consignee

• Loss of unsold goods

• Bad debts from sales

• Expenses incurred by the consignee

What is included in the Account Sale prepared by the consignee?

• Inventory of unsold goods

• Commission rates for the consignee

• Sales made and expenses incurred

• Details of goods sent

Which of the following is true about goods sent on consignment?

• They remain the property of the consignor until sold

• They are considered a liability for the consignee

• Ownership is transferred to the consignee

• They can be sold on credit only

What happens to unsold goods in a consignment arrangement?

• They are returned to the consignee

• They are written off as losses

• They remain the property of the consignor

• They are sold at a discount

What is the purpose of Del Credere Commission?

• To incentivize the consignee to sell more

• To provide a fixed income to the consignee

• To cover the risk of bad debts for credit sales

• To reward the consignee for high sales

In the books of the consignor, which account is debited for goods sent on consignment?

• Bank Account

• Commission Account

• Goods Sent on Consignment Account

• Consignee Account