ACCOUNTING FOR SPECIAL TRANSACTION

BY: ACE HAIRAL, MEAGAYLE CRUZ AND HEROLD GLENN

(KAYO NA BAHALA JAN)

ANSWER KEY

Quiz 1

1. A

2. A

3. D

4. B

5. C

6. A

7. C

8. C

9. D

10. A

QUIZ 2

1. A

2. C

3. A

4. B
5. B

6. A

7. C

8. 51, 000

9. D

10. C

PRELIM

1. C

2. A

3. A (ns)

4. A(NS)

5. B

6. D

7. C

8. A

9. d

10. A

11. B

12. D

13. CONSIGNOR

14. C

15. D

16. C
 17. D

18. B

19. A

20. D

21. C

22. C

23. C (NS)

24. B

25. B

1. X of Kolkata send out 1,000 bags to Y of Delhi costing 200 pesos each. Consignor’s expenses
2,000 pesos. Y’s expenses non-selling 1000 pesos, selling 2000 pesos. 100 bags were lost in
transit. Value of lost in transit will be:

Select one:

a. 20, 200 pesos ...

b. 20, 000 pesos

c. 23, 000 pesos

d. 20, 300 pesos

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Question 2

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Goods costing 200,000 pesos sent out to consignee at Cost + 25%. Invoice value of the goods will be:

Select one:

a. 250,000 pesos

b. none

c. 300, 000 pesos

d. 240, 000 pesos

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Question 3

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Rabin consigned goods for the value of 8,250 pesos to Raj of Kanpur and paid freight etc. of 650 pesos
and insurance 400 pesos. He drew a bill on Raj for 3 months after date for 3,000 pesos as an advance
against consignment, and discounted the bill for 2,960 pesos. Further, he received Account Sales from
Raj showing that, part of the goods had realized gross 8,350 pesos and that his expenses and
commission amounted to 870 pesos. The Inventories unsold was valued at 2,750 pesos. Consignee wants
to remit a draft for the amount due. The amount of draft will be:

Select one:

a. 5, 090 pesos
b. 5, 130 pesos

c. 2, 130 pesos

d. 4, 480 pesos

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Question 4

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X of Kolkata sends out 1,000 bags to Y of Delhi costing Php 2,000 each. 600 bags were sold at 10% above
cost price. Sales value will be:

Select one:

a. 1, 300, 000 pesos

b. 1, 320, 000 pesos

c. 1, 350, 000 pesos

d. 1, 200, 000 pesos

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Question 5

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X sent out certain goods to Y of Delhi. 1/10 of the goods were lost in transit. Invoice value of goods lost
12,500 pesos. Invoice value of goods sent out on consignment will be:

Select one:

a. 120, 000 pesos

b. 100, 000 pesos

c. 125, 000 pesos

d. 140, 000 pesos

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Question 6

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Goods of the Invoice value 240,000 pesos sent out to consignee at 20% profit on cost.

The loading amount will be:

Select one:

a. 40,000 pesos

b. None

c. 48,000 pesos

d. 50, 000 pesos

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Question 7

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P of Delhi sends out 100 boxes of toothpaste costing ` 200 pesos each. Each box consist of 12 packets. 60
boxes were sold by consignee at 20 pesos per packet. Amount of sale value will be:

Select one:

a. Php 12, 000

b. Php 14, 200

c. Php 14, 400

d. Php 13, 200

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Question 8

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Goods costing 180,000 sent out to consignee to show a profit of 20% on Invoice Price. Invoice price of
the goods will be:

Select one:
a. 216, 000 pesos

b. 210, 000 pesos

c. 225, 000 pesos

d. None

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Question 9

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X of Kolkata sends out 2,000 boxes to Y of Delhi costing 100 pesos each. Consignor’s expenses: 5,000
pesos. 1/10th of the boxes were lost in consignee’s go-down and treated as normal loss. 1,200 boxes
were sold by consignee. The value of consignment inventories will be:

Select one:

a. 60,250 pesos

b. 60,000 pesos

c. 61,500 pesos

d. 68,333 pesos

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Question 10

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X of Kolkata sends out goods costing 100,000 pesos to Y of Delhi. 3/5th of the goods were sold by
consignee for 70,000 pesos. Commission 2% on sales plus 20% of gross sales less all commission exceeds
cost price. The amount of Commission will be:

Select one:

a. 2, 833 pesos

b. 3, 000 pesos

c. 2, 900 pesos

d. 2, 800 pesos

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quiz 2

X of Kolkata sends out 500 bags to Y costing Php 400 each at an invoice price of Php 500 each.
Consignor’s expenses Php 4,000 consignee’s, non-selling expenses Php 1000, selling expenses Php 2,000.
400 bags were sold. The amount of Inventories Reserve will be:

Select one:

a. 10,000 pesos

b. 20, 000 pesos

c. 20, 400 pesos

d. Nil
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Question 2

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X of Kolkata sent out 2,000 boxes costing 100 pesos each with the instruction that sales are to be made
at cost + 45%. X draws a bill on Y for an amount equivalent to 60% of sales value. The amount of bill will
be:

Select one:

a. 290, 000 pesos

b. 200, 000 pesos

c. 174, 000 pesos

d. 120, 000 pesos

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Question 3

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X of Kolkata sends out certain goods to Y of Mumbai at cost + 25%. 1/2 of the goods received by Y is sold
at Php 176,000 at 10% above invoice price. Invoice value of goods send out is:
Select one:

a. 320, 000 pesos

b. 340, 000 pesos

c. 300, 000 pesos

d. 180, 000 pesos

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Question 4

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X of Kolkata sends out 400 bags to Y of Delhi costing Php 200 each. Consignor expenses Php2,000. Y’s
non selling expenses Php 2,000 and selling expenses Php 1,000. 300 bags were sold by Y. Value of
consignment Inventories will be:

Select one:

a. 20, 000 pesos

b. 21, 000 pesos

c. 20, 400 pesos

d. 20, 200 pesos

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Question 5

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Which of the following statement is wrong?

Select one:

a. Consignor is the owner of the consignment Inventories.

b.

All proportionate consignee’s expenses will be added up for valuation of consignment Inventories.

c.

Del-credere commission is allowed by consignor to protect himself from bad debt.

d.

Proportionate consignor’s expenses is added up with consignment Inventories.

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Question 6

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Commission will be shared by:

Select one:
a. Only Consignee

b. Consignor & Consignee

c. Only Consignor

d. Third Party

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Question 7

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X of Kolkata sends out goods costing Php 300,000 to Y of Mumbai at cost + 25%. Consignor’s expenses
Php 5,000. 1/10th of the goods were lost in transit. Insurance claim received Php 3,000. The net loss on
account of abnormal loss is:

Select one:

a. 27, 000 pesos

b. 30, 500 pesos

c. 27, 500 pesos

d. 25, 500 pesos

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Question 8

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X of Kolkata sends out 500 bags to Y costing Php 400 each at an invoice price of Php 500 each.
Consignor’s expenses Php 4,000 consignee’s non-selling expenses Php 1,000 and selling expenses Php
2,000. 400 bags were sold.

The amount of consignment Inventories at Invoice Price will be:

Select one:

a. 50, 800 pesos

b. 50,900 pesos

c. 50, 000 pesos

d. 51, 000 pesos

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Question 9

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Rahim of Kolkata sends out 1,000 boxes to Ram of Delhi costing Php 100 each at an invoice price of Php
120 each. Goods send out on consignment to be credited in general trading will be:

Select one:

a. None

b. 20, 000 pesos

d. 100, 000 pesos

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Question 10

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Which of the following statement is not true?

Select one:

a. Del-credere commission is generally relevant for credit sales.

b. If del-credere commission is allowed, bad debt will not be recorded in the books of consignor.

c. If del-credere commission is allowed, bad debt will be debited in consignment account.

d. Del-credere commission is allowed by consignor to consignee.

prelim exam

Which of the following expenses of consignee will be considered as non-selling expenses?

Select one:

a. Selling Expenses
b. Advertisement

c. Insurance

d. None of the above

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Question 2

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C of Bangalore consigned goods costing Php 3,000 to his agent at Delhi. Freight and insurance paid by
consignor Php 100. Consignee’s expenses Php 200. 4/5th of the goods were sold for Php 3,000.
Commission 2% on sales. Consignee want to settle the balance with the help of a bank draft. The amount
of draft will be:

Select one:

a. 2, 740 pesos

b. 3, 000 pesos

c. 2, 800 pesos

d. 1, 800 pesos

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Question 3

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The commission received from consignor will be transferred to which account?

Select one:

a. Balance Sheet

b. None of these

c. General Trading

d. General P/L

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Question 4

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Consignment Inventories will be recorded in the balance sheet of consignor on asset side at:

Select one:

a. At 10% lower than invoice value

b. At Invoice value less Inventories reserve

c. At lower than cost price

d. Invoice Value

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Question 5

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A of Mumbai sold goods to B of Delhi, the goods are to be sold at 125% of cost which is invoice price.
Commission 10% on sales at invoice price and 25% of any surplus realized above invoice price. 10% of
the goods sent out on consignment, invoice value of which is 12,500 pesos were destroyed. 75% of the
total consignment is sold by B at 100,000 pesos . What will be the amount of commission payable to B?

Select one:

a. 9, 000 pesos

b. 10, 937. 50 pesos

c. 10, 000 pesos

d. 9, 700 pesos

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Question 6

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X of Kolkata sends out goods costing Php 80,000 to Y of Mumbai so as to show 20% profit on invoice
value. 3/5th of the goods received by consignee is sold at 5% above invoice price. The amount of sales
value will be:
Select one:

a. 50, 400 pesos

b. 60, 000 pesos

c. 40, 000 pesos

d. 63,000 pesos

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Question 7

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X of Kolkata sends out 100 boxes to Y of Delhi costing Php 100 each. Consignor’s expenses Php 1,000.
Consignee’s selling expenses Php 500. 3/5th of the goods sold by consignee, ½ of the balance goods
were lost in consignee’s go down due to fire. The value of abnormal loss will be:

Select one:

a. 4, 000 pesos

b. 3, 000 pesos

c. 2, 200 pesos

d. None

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Which of the following item is not credited to consignment account?

Select one:

a. Inventories reserve on closing consignment inventories

b. Consignment inventories

c. Cash sales made by consignee

d. Credit sales made by consignee

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Question 9

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A proforma invoice is sent by:

Select one:

a. Consignee to Consignor
b. Customer/Debtors to Consignor

c. Consignor to Consignee

d. Customer/Debtors to Consignee

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Question 10

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In the books of consignor, the profit of consignment will be transferred to:

Select one:

a. General P/L A/c

b. General Trading A/c

c. Drawings A/c

d. None of these

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Question 11

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If del-credere commission is allowed for bad debt, consignee will debit the bad debt amount to:

Select one:

a. Consignor’s A/c

b. Commission Earned A/c

c. General Trading A/c

d. Trade receivables (Customers) A/c

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Question 12

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1,000 kg of apples are consigned to a wholesaler, the cost being Php 3 per kg plus Php 400 of freight, it
is known that a loss of 15% is unavoidable. The cost per kg will be:

Select one:

a. Php 5

b. Php 3

c. Php 3. 40

d. Php 4

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Question 13
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Consignment A/c is prepared in the books of :

Select one:

a. Third Party

b. Consignor

c. Consignee

d. None

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Question 14

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Goods sent out on consignment Php 200,000. Consignor’s expenses Php 5,000. Consignee’s expenses
Php 2,000. Cash sales Php 100,000, credit sales Php 110,000. Consignment Inventories Php 40,000.
Ordinary commission payable to consignee Php 3,000. Del-credere commission Php 2,000. The amount
irrecoverable from customer Php 2,000. What will be the profit on consignment?

Select one:

a. 43, 000 pesos

c. 38, 000 pesos

d. 40, 000 pesos

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Question 15

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X of Kolkata sends out 1000 boxes costing Php 200 each to Y of Delhi. 1/10th of the boxes were lost in
transit. 2/3rd of the remaining boxes sold by consignee at cost + 25%. The sale value will be:

Select one:

a. 140, 000 pesos

b. 120, 000 pesos

c. 100, 000 pesos

d. 150, 000 pesos

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Question 16

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X of Kolkata sends out goods costing Php 100,000 to Y of Mumbai at cost + 25%. Consignor’s expenses
Php 2,000. 3/5th of the goods were sold by consignee at Php 85,000. Commission 2% on sales + 20% of
gross sales less all commission exceeds invoice value. Amount of commission will be:

Select one:

a. 2, 000 pesos

b. 2, 500 pesos

c. 3, 083 pesos

d. 3, 000 pesos

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Question 17

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Ram of Kolkata sends out 1,000 boxes to Y of Delhi, costing Php 200 each. 1/10th of the boxes were lost
in transit. 2/3rd of the boxes received by consignee is sold at cost + 25%. The amount of sales value will
be:

Select one:

a. 100, 000 pesos

b. 120, 000 pesos

c. 140, 000 pesos

d. 150, 000 pesos

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Question 18

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Goods sent on consignment Php 760,000. Opening consignment Inventories Php 48,000. Cash sales Php
700,000. Consignor’s expenses Php 20,000. Consignee’s expenses Php 12,000. Commission Php 20,000.
Closing consignment Inventories Php 300,000. The profit on consignment is:

Select one:

a. None

b. 140, 000 pesos

c. 92, 000 pesos

d. 150, 000 pesos

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Question 19

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Ram of Kolkata sends out goods costing Php 100,000 to Y of Mumbai at 20% profit on invoice price.
1/10th of the goods were lost in transit. ½ of the balance goods were sold. The amount of Inventories
reserve on consignment Inventories will be:
Select one:

a. 11, 250 pesos

b. 4, 500 pesos

c. 9, 000 pesos

d. None

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Question 20

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Goods sent on consignment Invoice value Php 200,000, at cost + 33 1/3 %. 1/5th of the goods were lost
in transit. Insurance claim received Php 10,000. The amount of abnormal loss to be transferred to
General P/L is:

Select one:

a. 30, 000 pesos

b. 35, 000 pesos

c. 25, 000 pesos

d. 20, 000 pesos

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Question 21
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X of Kolkata sends out certain goods at cost + 25%. Invoice value of goods sends out Php 200,000. 4/5th
of the goods were sold by consignee at Php 176,000. Commission 2% up to invoice value and 10% of any
surplus above invoice value.

The amount of commission will be:

Select one:

a. 5, 200 pesos

b. 1, 600 pesos

c. 4, 800 pesos

d. 3, 200 pesos

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Question 22

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Out of the following at which point the treatment of “Sales” and “Consignment” is same:
Select one:

a. Risk

b. Money receive

c. Inventories outflow

d. Ownership transfer

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Question 23

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Which of the following statement is correct?

Select one:

a.

Consignee will pass a journal entry in his books at the time of receiving goods from consignor.

b.

Consignee will treat consignor as creditor at the time of receiving goods.

c.

The ownership of goods will be transferred to consignee at the time of receiving the goods.

d. Consignee will not pass any journal entry in his books at the time of receiving goods

from consignor.

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Question 24

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X of Kolkata sends out 100 boxes to Y of Delhi costing Php 200 each. Consignor’s expenses Php 4,000.
Consignee’s non-selling expenses (incurred till goods were reached to go down) Php 900 and selling
expenses php 500. 1/10th of the boxes were lost in transit. 2/3rd of the boxes received by consignee
were sold. The amount of consignment Inventories will be:

Select one:

a. 6, 000 pesos

b. 7, 500 pesos

c. 7, 200 pesos

d. 7, 000 pesos

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Question 25

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The consignment accounting is made on the following basis:

a. Cash Basis

b. Accrual

c. None

d. Realization