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    AFAR - Solutions To The Problems - Test Bank & Reviewer

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    spaynante
    The document provides examples of consignment sales transactions and questions to test understanding of accounting for consignment sales. It includes details of units shipped on consignment, costs, selling prices, commissions, expenses and remittances. Questions assess understanding of inventory amounts, units sold, profits/losses for the consignor from the transactions.

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    AFAR - Solutions To The Problems - Test Bank & Reviewer

    Uploaded by

    spaynante
    73 views4 pages
    The document provides examples of consignment sales transactions and questions to test understanding of accounting for consignment sales. It includes details of units shipped on consignment, costs, selling prices, commissions, expenses and remittances. Questions assess understanding of inventory amounts, units sold, profits/losses for the consignor from the transactions.

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    AFAR_ Solutions to the Problems_Test Bank & Reviewer

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    The document provides examples of consignment sales transactions and questions to test understanding of accounting for consignment sales. It includes details of units shipped on consignment, costs, selling prices, commissions, expenses and remittances. Questions assess understanding of inventory amounts, units sold, profits/losses for the consignor from the transactions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    73 views4 pages

    AFAR - Solutions To The Problems - Test Bank & Reviewer

    Uploaded by

    spaynante
    The document provides examples of consignment sales transactions and questions to test understanding of accounting for consignment sales. It includes details of units shipped on consignment, costs, selling prices, commissions, expenses and remittances. Questions assess understanding of inventory amounts, units sold, profits/losses for the consignor from the transactions.

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    © All Rights Reserved
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    You are on page 1of 4

    Part I: Theory of Accounts

    1. Goods out on consignment are part of the inventory balance of _____.


    A. The consignor
    B. The consignee
    C. The customer
    D. The supplier

    2. Which of the following statements is true about consignment sales?


    A. Both the consignor and consignee recognize sales revenue after the goods
    have been sold to third party customers
    B. Sales revenue are recognized at the point in time when the consignor
    transfers the goods to the consignee
    C. Inventory risks still rests with the consignor even after transfer of goods to
    the consignee
    D. The consignor receives a commission from the consignment sales

    3. Which party is exposed to credit risk?


    A. The consignee
    B. The consignor
    C. Both a and b
    D. Neither a nor b

    4. This document shows all the sales transaction made by the consignee on
    behalf of the consignor with all commissions and other charges included.
    A. Sales order
    B. Sales invoice
    C. Account sales
    D. Accounts receivable

    9208
    1. Ji Pyeong shipped 100 units of its inventories to Do San on consignment.
    Each unit costs P450 and has a standard retail price of P750. The 100 units
    had a freight-in charge of P3,750. After a month, Do San returned 10 units of
    inventory and remitted P32,850 cash to Ji Pyeong together with an account
    sales with the following items included:
    • Commission of 20%
    • Cartage on consigned goods, P750
    • Marketing and promotional expenses, P1,500
    • Delivery to customer and installation, P900

    1. How many units were sold by Do San?


    A. 0 units
    B. 40 units
    C. 60 units
    D. 100 units

    2. How much is the cost of inventory still out on consignment at the end of
    the month?
    A. 9,900
    B. 14,850
    C. 15,300
    D. 0

    3. How much is the total consignment profit or (loss) recognized by Ji


    Pyeong?
    A. (3,825)
    B. (3,450)
    C. 3,450
    D. 3,720
    2. Hua Ze Lei consigned 10,000 products to Dao Ming Si costing P72 each and
    can be sold for P120. The consignment agreement provides that Dao Ming Si
    is entitled to a 15% commission on the sales, but is required make an advance
    equivalent to 60% of the cost of the goods. The advance made is to be
    recovered through reduction from the monthly remittance, the amount of
    which is proportionate to the number of goods sold. At the end of the month,
    the account sales showed the following information:
    • Commission charges, P27,000
    • Freight-out, P18,000
    • Advertising costs, P9,000

    1. How much was the total remittance made by Dao Ming Si for the month?
    A. 61,200
    B. 64,800
    C. 126,000
    D. 180,000

    2. How much is the total consignment profit or (loss) recognized by Hua Ze


    Lei?
    A. (18,000)
    B. 18,000
    C. 25,000
    D. 41,000

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