Consignment Account - Meaning/Definition - SS3 Accounting Past Questions and Answers - page 1
1
What is a consignment account?
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A
An account used to store personal items
B
An account used to sell goods on behalf of another party
C
An account used to receive commission payments
2
Who retains ownership of the goods in a consignment agreement?
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A
The consignor
B
The consignee
C
Both the consignor and the consignee
3
What is the role of the consignee in a consignment agreement?
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A
To sell the goods on behalf of the consignor
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B
To purchase the goods from the consignor
C
To provide storage space for the consignor's goods
4
What is the commission paid to the consignor based on?
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A
The cost of the goods
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B
The sales price of the goods
C
The amount of time the goods were held in inventory
5
In which industry are consignment accounts commonly used?
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A
Hospitality
B
Manufacturing
C
Retail
6
What is the difference between a consignor and a consignee in a consignment agreement?
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7
Why might a manufacturer or distributor use a consignment account to sell their products?
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