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Question
For recording loading on unsold stock, which of the following entry is passed in the books of Consignor?
A. Consignment Stock A/c
To Stock Reserve A/c
Dr. B. Consignment A/c
To Stock Reserve A/c
Dr. C. Stock Reserve A/c
To Consignment A/c
Dr. D. Stock Reserve A/c
To Consignment Stock A/c
Dr.
For recording loading on unsold stock, which of the following entry is passed in the books of Consignor?
| A. Consignment Stock A/c To Stock Reserve A/c | Dr. |
| B. Consignment A/c To Stock Reserve A/c | Dr. |
| C. Stock Reserve A/c To Consignment A/c | Dr. |
| D. Stock Reserve A/c To Consignment Stock A/c | Dr. |
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Solution
The correct option is C B
Loading is the amount of profit included in the invoice value of the goods sent on consignment. When they remain unsold at the time of preparing final accounts, the stock has to be recorded at invoice value less loading in the books of accounts. This is done by first recording the closing stock at invoice value in the consignment account and then transferring the loading to the stock reserve account from the consignment account. The entry is as follows:Consignment A/c Dr. To Stock reserve A/c
Loading is the amount of profit included in the invoice value of the goods sent on consignment. When they remain unsold at the time of preparing final accounts, the stock has to be recorded at invoice value less loading in the books of accounts. This is done by first recording the closing stock at invoice value in the consignment account and then transferring the loading to the stock reserve account from the consignment account. The entry is as follows:
Consignment A/c Dr.
To Stock reserve A/c
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