{"id":3458,"date":"2023-10-05T10:24:52","date_gmt":"2023-10-05T10:24:52","guid":{"rendered":"http:\/\/localhost\/ecole9ja\/?p=3458"},"modified":"2023-10-05T10:33:08","modified_gmt":"2023-10-05T10:33:08","slug":"week-10-ss2-third-term-financial-accounting-notes","status":"publish","type":"post","link":"https:\/\/ecolebooks.com\/nigeria\/posts\/week-10-ss2-third-term-financial-accounting-notes\/","title":{"rendered":"Week 10 – SS2 Third Term Financial Accounting Notes"},"content":{"rendered":"

WEEK TEN
\n<\/strong>TOPIC: CONSIGNMENT ACCOUNT
\n<\/strong>CONTENT
\n<\/strong><\/p>\n

    \n
  1. \n
    Definition
    \n\t\t\t\t\t<\/strong><\/div>\n<\/li>\n
  2. \n
    Accounting Entries
    \n\t\t\t\t\t<\/strong><\/div>\n<\/li>\n
  3. \n
    Practical illustration
    \n\t\t\t\t\t<\/strong><\/div>\n<\/li>\n<\/ol>\n

    Note
    \n<\/strong>Consignment of good means the sending of goods by a supplier to his agent to receive, store and sell them on behalf of the supplier after which the proceeds, having deducted all expenses incurred, will be remitted to supplier. The sender of the goods is called consignor while the agent to whom the goods are sent is called consignee.<\/p>\n

    \u00a0ACCOUNTING ENTRIES
    \n<\/strong>In the Books of the consignor you will open
    \n(a) \u00a0\u00a0\u00a0\u00a0Consignment account
    \ni. \u00a0\u00a0\u00a0\u00a0Debits all expenses relating to goods consigned
    \nii. \u00a0\u00a0\u00a0\u00a0Credits all revenue relating to goods consigned <\/p>\n

    \u00a0(b) Goods sent on consignment account
    \ni. \u00a0\u00a0\u00a0\u00a0Debit trading a\/c with the value of goods consigned
    \nii. \u00a0\u00a0\u00a0\u00a0Credit consignment account<\/p>\n

    \u00a0(c) \u00a0\u00a0\u00a0\u00a0Bank account (Extracts)
    \ni. \u00a0\u00a0\u00a0\u00a0Debit proceed from consignee (agent) after deducting all expenses incurred.
    \nii. \u00a0\u00a0\u00a0\u00a0Credit all expenses incurred by the consignor. <\/p>\n

    \u00a0(d) \u00a0\u00a0\u00a0\u00a0Consignee account i. Debit sales account
    \nii.\u00a0\u00a0\u00a0\u00a0Credit all expenses incurred in respect of sales <\/p>\n

    \u00a0EVALUATION QUESTION
    \n<\/strong>1. \u00a0\u00a0\u00a0\u00a0Define the term consignment of goods
    \n2.\u00a0\u00a0\u00a0\u00a0Explain a. Consignor b. Consignee<\/p>\n

    \u00a0Practical Illustration
    \n<\/strong>On January 1, 1995, Pfizer Product Plc consigned 10 cartons of visine eye drop to Standard Pharmacy at N150 per carton. In the course he paid N400 for freight charges, N140 for insurance, and N850 for advertisement. On receiving the goods on January 5 Standard Pharmacy incurred the following expenses. Storage N100, wages N380, selling expenses N120. By January 24, Standard Pharmacy had sold all the articles and realized a total sum N21,500 in the following analysis is sales by cash N20,000, Credit sales to Kunle N1,500. The agreed commission was 3% and del-credere commission was 2% of the total sales. Required
    \n1.\u00a0\u00a0\u00a0\u00a0Prepare the account submitted by consignee on 31\/1\/95
    \n2.\u00a0\u00a0\u00a0\u00a0Prepare all necessary account to record the transaction in the books of the consignor.
    \nSolution
    \n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Account sales submitted by Standard Pharmacy
    \n\t\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0N\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0N
    \n\u00a0\u00a0\u00a0\u00a0Sales\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a021,500
    \n\u00a0\u00a0\u00a0\u00a0Less: Storage\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0100
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Wages \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0380
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Selling expenses \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0120
    \nCommission: General (0.03 x 21,500)\u00a0\u00a0\u00a0\u00a0645
    \n\u00a0\u00a0\u00a0\u00a0”\u00a0\u00a0\u00a0\u00a0Del-credere (0.02 x 21,500) 430\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(1,675)
    \n\t\t\u00a0\u00a0\u00a0\u00a0Sight draft enclosed\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a019,825
    \n\t\t2.\u00a0\u00a0\u00a0\u00a0In the books of Pfizer Product Plc. (consignor)
    \n\"\"\/\"\"\/Good sent on consignment account
    \n<\/strong>\u00a0\u00a0\u00a0\u00a0 Trading a\/c (N1,500 x 10) 15,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0consignment\u00a0\u00a0\u00a0\u00a015,000
    \n\"\"\/Consignment Account
    \n<\/strong>\"\"\/Goods sent on consignment 15,000\u00a0\u00a0\u00a0\u00a0standard pharmacy \u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a021,500
    \nBank: freight cheque \u00a0\u00a0\u00a0\u00a0 400
    \n\u00a0\u00a0\u00a0\u00a0Advertisement\u00a0\u00a0\u00a0\u00a0 850
    \n\u00a0\u00a0\u00a0\u00a0Insurance \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 140
    \nStandard Pharmacy
    \nStorage\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 100
    \nWages\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 380
    \nSelling expenses \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 120
    \nCommission: General \u00a0\u00a0\u00a0\u00a0 645
    \nDel-credere commission \u00a0\u00a0\u00a0\u00a0 430
    \nP&L a\/c (profit) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 3,435
    \n\t\t\"\"\/\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 21,500\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a021,500
    \n\"\"\/\"\"\/Bank account (Extracts)
    \n<\/strong>Standard Pharmacy \u00a0\u00a0\u00a0\u00a019,825\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Consignment \u00a0\u00a0\u00a0\u00a0 N
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Freight charges\u00a0\u00a0\u00a0\u00a0400
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Advertisement\u00a0\u00a0\u00a0\u00a0850
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Insurance\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0140<\/p>\n

    \u00a0\"\"\/\"\"\/Standard Pharmacy account (consignee)
    \n<\/strong>Consignment: sales \u00a0\u00a0\u00a0\u00a021,500\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Consignment \u00a0\u00a0\u00a0\u00a0 N
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Storage \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 100
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Wages\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 380
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Selling expense\u00a0\u00a0\u00a0\u00a0 120
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Comm. General\u00a0\u00a0\u00a0\u00a0 645
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Del-credere \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 430
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Bank\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a019,825
    \n\t\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a021,500\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a021,500 <\/p>\n

    \u00a0EVALUATION QUESTION
    \n<\/strong>1. \u00a0\u00a0\u00a0\u00a0List the accounts that are opened to record consignment of goods.
    \n2.\u00a0\u00a0\u00a0\u00a0Explain the treatment of consignment outwards in the balance sheet.<\/p>\n

    \u00a0Reading Assignment
    \n<\/strong>Simplified Bookkeeping and A\/C, Femi Olatunji 260 -265 <\/p>\n

    \u00a0Weekend Assignment
    \n<\/strong><\/p>\n

      \n
    1. \n
      The person that sends goods to another person for the purpose of selling it is (a) collector (b) consignor (c) consignee (d) none of the above\n<\/div>\n<\/li>\n
    2. \n
      The person who received the goods on behalf of another is (a) consignor (b) collector (c) consignee (d) none of the above\n<\/div>\n<\/li>\n
    3. \n
      Consignment of goods means (a) receiving of goods (b) producing of goods (c) sending of goods (d) all of the above\n<\/div>\n<\/li>\n
    4. \n
      In Goods sent on consignment account, consignment is (a) Debited (b) credited (c) all of the above (d) none of the above\n<\/div>\n<\/li>\n
    5. \n
      In consignment account, advertisement is (a) revenue (b) expenses (c) income (d) none of the above.\n<\/div>\n<\/li>\n<\/ol>\n

      \u00a0SECTION B
      \n<\/strong>On February 1, 1997 Fadeke Stores consigned 100 cases of electric clippers to her agent Bimbo, at N3,000 per case sundry expenses N420. Bimbo expenses are: warehousing N20 Railways charges N150, selling expenses N50. On April, Bimbo sold the whole consignment for N380,000 and all receipt were taken in cash. Commission Bimbo 3% plus a delcredere commission to of 1% on sales. On 13th<\/sup> April Bimbo prepared his account sales which, together with bank draft for-remittance, was sent to Fadeke. Required to prepare.
      \na.\u00a0\u00a0\u00a0\u00a0The account sales sent by Bimbo
      \nb.\u00a0\u00a0\u00a0\u00a0The necessary ledger accounts in the books of consignor (Fadeke)<\/p>\n

      \u00a0GENERAL EVALUATION\/REVISION QUESTIONS
      \n<\/strong><\/p>\n

        \n
      1. What are books of prime entry\n<\/li>\n
      2. List any seven books of prime entry\n<\/li>\n
      3. Explain the following concepts (a) business entity (b) going \u2013 concern\n<\/li>\n
      4. What is a ledger\n<\/li>\n
      5. List and explain three classification of ledger accounts.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

        WEEK TEN TOPIC: CONSIGNMENT ACCOUNT CONTENT Definition Accounting Entries Practical illustration Note Consignment of good…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,274],"tags":[],"class_list":["post-3458","post","type-post","status-publish","format-standard","hentry","category-posts","category-third-term-ss2-financial-accounting"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/3458","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/comments?post=3458"}],"version-history":[{"count":1,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/3458\/revisions"}],"predecessor-version":[{"id":3459,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/3458\/revisions\/3459"}],"wp:attachment":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/media?parent=3458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/categories?post=3458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/tags?post=3458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}