Consignment Accounting: Understanding Invoice Price and Loading Reversal

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Business, Architecture
•
10th Grade - University
•
Hard
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10 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why might a consigner choose to invoice goods at a price higher than the cost?
To reduce the consignee's competition
To hide the actual cost and profit from the consignee
To comply with tax regulations
To increase the consignee's profit
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is unrealized profit in the context of consignment?
Profit that is earned when goods are sent to the consignee
Profit that is taxed immediately
Profit that is realized when goods are sold to the final customer
Profit that is shared between consigner and consignee
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How is the invoice price calculated if goods are invoiced at 20% above cost?
Cost minus 20% of the invoice price
Cost minus 20% of the cost
Cost plus 20% of the invoice price
Cost plus 20% of the cost
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the purpose of reversing the loading in consignment accounts?
To increase the profit margin
To simplify accounting entries
To comply with tax regulations
To reflect the net purchase cost
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following transactions does NOT require reversing the loading?
Abnormal loss
Goods sent on consignment
Goods returned by the consignee
Sales made by the consignee
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the journal entry for recording opening stock in consignment?
Stock Reserve Account Debit to Consignment Account
Consignment Account Debit to Stock on Consignment Account
Stock on Consignment Account Debit to Consignment Account
Consignment Account Debit to Stock Reserve Account
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How is an abnormal loss recorded in the consignment account?
As a debit to the abnormal loss account
As a credit to the consignment account
As a credit to the abnormal loss account
As a debit to the consignment account
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