Professional Documents
Culture Documents
ACCOUNTING ASPECTS
by :
DR. T.K. JAIN
AFTERSCHO☺OL
centre for social entrepreneurship
sivakamu veterinary hospital road
bikaner 334001 rajasthan, india
FOR – PGPSE / CSE PARTICIPANTS
mobile : 91+9414430763
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My words....
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What is consignment ?
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Who is consignor / consignee?
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What is the difference between
sale and consignment ?
It is prepared by consignor
it accompanies goods – when goods are sent to
consignee
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What is account sales ?
It is prepared by consignee.
It shows the sales undertaken by consignee
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What is the benefit to consignee ?
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What are consignment expenses ?
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What is over-riding commission ?
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How to valuate stock ?
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Example : A sent goods of invoice price
1200 to B. Which are lying in godown of
B. What inventory will you show on
31/3/10? Invoice price is 20% above cost.
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What accounts are prepared by
consignor ?
He prepares 2 accounts :
1. consignment to XYZ account
2. consignee account
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What accounts are prepared by
consignee ?
1. consignor account
2. conignment inward book
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What entries are made by
consignor while despatching
goods ?
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What entries are made by
consignor when consignee sells
goods ?
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What entry is made by consignor
when expenses are incurred by
consignee ?
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What entry is made by consignor
when he himself incurs expenses ?
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What are the contents of
consignment a/c ?
• DEBIT SIDE • CREDIT SIDE
• Opening stock • Sales by consignee
• All the expenses, • Stock (closing stock)
details of goods sent,
• Expenses incurred
by consignee
• Profit
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What are the contents of
consignee account ?
• DEBIT SIDE • CREDIT SIDE
• Details of goods • All the expenses
sold by consignee • (consignment
(consignment a/c ) account)
• • Bank / cash
• payments received
from consignee
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What accounting entry will be
made when consignee receives
goods from consignor ?
No accounting entry is required
the consignee is not the owner of the goods,
hence, no accounting entry is required.
However, there is a book maintained by
consignee, which shows the arrival of the
goods. This is called consignment inward
book.
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What accounting entry is required
when consignee sells the goods
(in the books of consignee) ?
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What accounting entry is required
when consignee spends money on
behalf of consignor (in the books
of consignee) ?
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What accounting entry is required
for closing stock (in the books of
consignor) ?
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What accounting entry is required
for closing stock (in the books of
consignee) ?
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Solve this question
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How to handle loss ?
• There are two types
of loss : 1 normal 2
abnormal loss
• we have separate
accounting for these
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How to adjust normal loss in
consignment ?
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1,000 tonnes of limestone is consigned @20
per tonne, freight thereon being Rs. 4,000.
the quantity sold is 600 tonnes and that unsold
is 350 tonnes,there is a normal of loss 50
tonnes.
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How to handle abnormal loss ?
There are two possibilities :
1. loss is insured
2. loss is not insured
if loss is insured, the insurance company will
pay the money. So create an abnormal loss
account and close it from the money received
from insurance company. If there is no
insurance, the entire loss must be transferred
to Profit and loss account
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What is joint venture ?
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What is the difference between
joint venture and partnership ?
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What are the systems of
accounting in joint venture ?
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when separate books are
maintained
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Memorandum method
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Example
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Joint venture party a/c C's personal account (in the
books of B )
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When separate books of accounts
are maintained for joint venture ?
Here there are separate books of joint venture
account. These books are maintained in the
joint venture itself. Thus each party need not
maintain complete accounts.
Here we have following accounts :
1. joint venture account
2. joint bank account
3. personal account of the joint venture party
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Details of the accounts :
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Joint venture account
• DEBIT • CREDIT
• To A 35000
• By sales 1000000
• To B 15000
• To B 25000 •
• To bank material 400000
• To bank wages 100000
• To profit 425000
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Joint bank account
• Debit • Credit
• To A 200000 • By joint venture
• To B 100000 400000
• To sales 1000000 • By joint venture
100000
• By a 490000
• By B 310000
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JOINT VENTURERS A/C A
• DEBIT • CREDIT
• To bank : 490000 • By bank 200000
• By joint venture
35000
• By profit 255000
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JOINT VENTURERS A/C B
• To bank : 310000 • Credit
• By bank 100000
• By joint venture
15000
• By joint venture
25000
• By profit 170000
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