Question

stock of goods with the consignee in the beginning of the second year is given, the following effect will be given in the books of the consignorRequired to answer. Single choice.

(1 Point)

Credited to Profit and Loss Account

Debited to Consignor's Account

In the Balance Sheet

Debited to Consignment Account


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Answer 1

The correct answer is Debited to Consignment Account.

Explanation:

• A system in which one person sends the goods to another so that the latter can sell those goods on behalf of the person who sends it in the first place is referred as Consignment.
• There will be no entries passed in the books of the consignee for the consignment of goods sent by the consignee and also for any expenses incurred by the consignor.
• Though, the advance paid to the consignor, sales made, expenses incurred on the consignment and commission earned needs to be recorded.
• Hence, the correct answer is Debited to Consignment Account.