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Home Accounting For Consignment/Consignment Accounts Consignment Accounting Questions and Answers

Consignment Accounting Questions and Answers:

Learning Objectives:

  1. Answer the various general questions about consignment accounting.

Theoretical Questions:

  1. Distinguish between a sales and consignment. Click here to see answer.

  2. What is "consignment of goods"? Is it the same as "goods on sale or return" Click here to see answer.

  3. Describe how the consignment account is maintained in the books of
    (a) consignor (b) the consignee. Click here to see answer.

  4. Write a not on "del credere commission". Click here to see the explanation of del credere commission.

  5. If a consignment remains partly unsold (closing stock or unsold stock) at the time of balancing the books, how do you deal with it? Click here to see the answer.


State whether each of the following statements is 'true' or 'false'.

  1. Despatch of goods on consignment amounts to sale of goods by the consignor.

  2. A consignee is paid over-riding commission for bearing the risk of bad debts on account of credit sales made by him.

  3. Sales account and account sales are synonymous terms.

  4. The consignee passes no entry in his books for unsold stock of the consignor, lying with him.

  5. Discount on bills discounted is debited on profit and loss account and not to the consignment account on account of it being treated as a financial expense.

  6. Abnormal loss of stock arises on account of natural and inherent characteristics of goods.

  7. As soon as goods are sent to the consignee, consignee becomes liable to pay for them.

  8. Account sales is submitted by consignee to the consignor.

  9. Value of abnormal loss or stock is debited to consignment account.


  1. False 2. False 3. False
  4. True 5. True 6. False
  7. False 8. True 9. False

Fill in the Blanks:

  1. Goods despatched by a manufacturer or wholesaler to an agent for the purpose of sale are called ----------------------.

  2. Abnormal loss is credited to ------------------------ account.

  3. Del-Credere commission is normally calculated on ---------------------- sales.

  4. The document giving the description of goods and their price sent to the consignee by the consignor is known as -------------------------.

  5. Consignment account of the nature of a ------------------------- account.


  1. Consignment 2. Consignment 3. Total
  4. Pro forma invoice 5. Normal  

Choose the Best Answer:

  1. In accounting consignment, signifies
    (a). goods forwarded from one place to another
    (b). goods forwarded by a person to another.
    (c). goods despatched by its owner to its agent
    (d). goods despatched by it owner to his agent for the purpose of sale.

  2. Goods sent on consignment should be debited by consignor to:
    (a). consignment account
    (b). goods sent on consignment account
    (c). consignors account

  3. In the books of consignor the balance of the consignment stock would be shown:
    (a). as an asset in the balance sheet.
    (b). as liability in the balance sheet.
    (c). On the credit side of the trading account.

  4. In the books of consignee, on despatch of goods by the consignor the entry would be:
    (a). Consignment account  [Dr.]
                   To goods sent on consignment account  [Cr.]
    (b). consignment account  [Dr.]
                   To consignor account  [Cr.]
    (c). No entry

  5. In the books of consignee the expenses incurred by him on consignment are debited to:
    (a). consignment account
    (b). cash account
    (c). consignor's account

  6. In the books of consignee the sale of goods is credited to:
    (a). consignor's account
    (b). sales account
    (c). consignee's account


  1. d 2. a 3. a
  4. c 5. c 6. a

You may also be interested in other articles from "accounting for consignment" chapter:

  1. Definition and Explanation of Consignment
  2. Distinction/Difference Between Consignment and Sale
  3. Definitions of Important Terms Used in Consignment Accounting
  4. Consignment Accounting Journal Entries
  5. Valuation of Unsold Stock Or Closing Stock in Consignment Accounting
  6. Valuation and Treatment of Normal and Abnormal Loss in Consignment Accounting
  7. Invoicing Goods Higher Than Cost in Consignment
  8. Consignment Accounting Problems, Exercises and Questions
  9. Consignment Accounting Questions and Answers


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