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CMA Foundation · Fundamentals of Financial and Cost Accounting · Consignment

Which statement about the Account Sales sent by a consignee to the consignor is correct?

An Account Sales is a periodic statement prepared by the consignee and sent to the consignor. It shows the sales made, expenses incurred on the goods, commission earned, any advances paid, and the net amount due or remitted to the consignor.

  1. AIt shows the consignee's total profit from his own business
  2. BIt is a statement of sales, expenses, commission and the net amount due or remitted to the consignorCorrect
  3. CIt lists only the goods dispatched by the consignor with their invoice price
  4. DIt is prepared by the consignor to record the closing stock held by the consignee

Explanation

The Account Sales is prepared by the consignee and sent to the consignor. It records sales made, expenses incurred, commission earned, any advance or bills, and the balance remitted. It does not show the consignee's own profit nor the consignor's dispatches only.

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