Accounting for Special Transactions – Sale of Goods on Approval or Return Basis 1 Special Transactions - Sale of Goods on Approval or Return Basis 1 / 52 Q.30 Under sales on return or approval basic (when transaction are few) the seller, sends goods by treating these as An ordinary sale and no entry is passed in the books An ordinary sale and entry from normal sale is passed in the books Sale on approval and no entry is passed Any one of above 2 / 52 Q.28 A sent some goods costing Rs.3,500 at a profit of 25% on Sale to B on Sale or Return basis .B Returned goods costing RS.800.At the end of the accounting period i.e.on 31st december,2005 the remaining goods were neither Returned nor were approved by him the stock on approval will be shown in the balance sheet at Rs. 2,000 2,700 2,700 less 25% of 2,700 3,500 3 / 52 Q.27 On 31st dec.,2005 goods sold at a Sale price of Rs.30,000 were lying with the customers ,M to whom these goods were sold on 'Sale or Return basis ' and recorded as actual Sales.Since no consent was received from M,the adjustment entry was made presuming goods were sent on approval at a profit of cost + 20%.in the balance sheet,the stock with customers account will be shown at rs. 30,000 24,000 20,000 25,000 4 / 52 Q.26 Under sales on return or approval basis, when transactions are numerous the seller while sending the goods treats then as : An ordinary sale but no entry is passed in the books An ordinary sale and entry for normal sale is passed in the books Approval sales and no entry is passed None of the above 5 / 52 Q.25 Which types of account is sale or return day book Personal A/c Suspense A/c Memorandum A/c Nominal A/c 6 / 52 Q.23 A merchant sends out his goods casually to his dealers on approval basis. All such transaction are, however, recorded as actual sales and are passed through the sales book. On 31.12.2008, it was found that 200 article at a sale price of 200 each sent on approval basic were recorded as actual sales at that price. The sale price was made at cost plus 25% . The amount of stock on approval will be Rs.32,000 Rs.40,000 Rs. 30,000 None of the above 7 / 52 Q.22 In case business sends goods casually, If customers returns the goods on a subsequent date, which entry has to be passed : Return in inwards a/c Dr. To Debtors a/c Sale a/c Dr. To Customers a/c No entry None of these 8 / 52 Q.21 when Sales or return day book & sales or return ledgers are maintained & the goods are approved by the customers ,these are recorded Initially in the Sale or Return Ledger .Thereafter , in the Sale or Return Day Book only in the sales or return day book only in the Sale Day Book both in the sales or return day book & sales day book 9 / 52 Q.20 When the goods are returns by the customers within the specified time ,they are recorded Initially in the Sale or Return Ledger .Thereafter , in the Sale or Return Day Book Initially in the Sale or Return Day Book .Thereafter , in the Sale or Return Ledger only in the Sale or Return Day Book only in the Sale or Return Ledger 10 / 52 Q.19 which of the following is not a main column of Sales or Return journal ? goods sent on approval column goods Returned column goods approved column purchase column 11 / 52 Q.18 A company sends its cars to dealers on 'Sale or Return' basis .All such transactions are, however recorded as actual Sales and passed through the Sales book. Just before the end of financial year , two cars which had cost RS.55,000 each have been sent on Sale or Return basis and have been debited to customers account at Rs.75,000 each, cost of goods lying with the customers will be Rs.1,10,000 Rs.55,000 Rs.75,000 None of these 12 / 52 Q.17 A merchant sends out his goods casually to his dealers on approval basis .All such transactions are, however recorded as actual Sales and passed through the Sales book On 31-12-2005,it was found that 100 articles at a Sale price of 200 each sent on approval basis were recorded as actual Sales at that price .The Sale price was made at cost + 25 % . The amount of stock on approval will be amounting. to Rs. 16,000 20,000 15,000 None of these 13 / 52 Q.15 There was no communication from the customer Rs.2,00,000 Rs.2,80,000 Rs.3,00,000 Rs.1,80,000 14 / 52 Q.14 The customer returned 20% of the goods approval 80% of the remaining goods on 31st march, 2006 Rs.2,16,000 Rs.2,12,800 Rs.2,00,000 Rs.2,28,000 15 / 52 Q.13 The customer returned 20% of the goods an approved the balance on 31st March, 2006 Rs.2,16,000 Rs.2,80,000 Rs.3,00,000 Rs.1,80,000 16 / 52 Q.12 The customer approved 80% of the goods on 31st March,2006 Rs.2,16,000 Rs.2,80,000 Rs.3,00,000 Rs.1,80,000 17 / 52 Q.11 Mr. P sent goods worth Rs.50,000 on 11th March on reject or approval basis. Out of which goods worth Rs.30,000 were accepted by the customers till 31st March and the remaining were still pending with the customers as on 31st March. How would you deal with the goods lying with the customer as on 31st March. Assumption 25% profit on cost -- Deduct Rs.20,000 from sales and debtors and include goods worth Rs.16,000 in closing stock Deduct Rs.50,000 from sales and debtors and include goods worth Rs.20,000 in closing stock. Deduct Rs.50,000 from sales and debtors and include goods worth Rs.16,000 in closing stock. Deduct Rs.20,000 from sales and debtors and include goods worth Rs.20,000 in closing stock.Assume profit on sales is 20% 18 / 52 Q.10 Mr.Z sent goods worth Rs.50,000 on 1st march on reject or approval basis. Goods worth Rs.25,000 were still pending with the customer on 31st March and the remaining goods were accepted by the customer.How Would you deal with the goods lying with the customers as 31st March . Assuming that the goods were invoiced at 25% above the cost price Deduct Rs.25,000 from Sales and debtors and include goods wroth Rs.20,000 in closing stock. Deduct Rs.50,000 from sales and Debtors and include goods worth Rs.25,000 in closing stock. Deduct Rs.50,000 from sales and Debtors and include goods worth Rs.25,000 in closing stock. Deduct Rs.25,000 from sales and Debtors and include goods worth Rs.20,000 in closing stock. 19 / 52 Q.8 In Sale or Return ledger All the customers are individually debited and the sale or return account is credited with the periodical total of the Sale or Return Day Book All the customers are debited in total and the sale or return account is credited with the periodical total of the Sale or Return Day Book All the customers are individually debited and the sale or return account is credited with the individual total of the Sale or Return Day Book None of these 20 / 52 Q.7 A trader has credited certain items of Sale on approval aggregating Rs.60,000 to Sales account .Of these ,goods of the value of Rs.16,000 have been Returned and taken into stock at cost Rs.8,000 though the records of Return was omitted in the accounts .In respect of another parcel of Rs.12,000 (cost being Rs.6,000) the period of the approval did not expire on closing date . Cost of goods lying with the customers should be Rs.12,000 Rs.54,500 Rs.6,000 None of these 21 / 52 Q.6 A trader has credited certain items of sales on approval aggregating Rs.60,000 to Sales Account. Of these, goods of the value of Rs.16,000 have been returned and takes into stock at cost Rs.8,000 though respect of another parcel of Rs.12,000 (cost being Rs.6,000) The period of approval did not expire on the closing date. Cost of goods lying with customers should be Rs.12,000 Rs.54,000 Rs.6,000 None of the above 22 / 52 Q.5 Under Sales or Return or approval basis, when transactions are large , & the seller, sends the goods on approval or return basis,the accounting treatment will be No journal entry entry in sales or return journal entry in sales or return day book Sundry Debtors account -Dr To Sales account 23 / 52 Q.4 Which of these statements is not true? Goods lying with the customers are valued at Cost price Sale and return book is used when the goods are either approved or rejected Sale or return ledger is a Kaccha ledger Sales or return day book is customer's record 24 / 52 Q.30 Under sales on return or approval basic (when transaction are few) the seller, sends goods by treating these as An ordinary sale and no entry is passed in the books An ordinary sale and entry from normal sale is passed in the books Sale on approval and no entry is passed Any one of above 25 / 52 Q.29 Umesh sends goods on approval basis as follows: The stock of goods sent on approval basis on 31st Jan will be Rs.500 Nil Rs.260 None of these 26 / 52 Q.28 A sent some goods costing Rs.3,500 at a profit of 25% on Sale to B on Sale or Return basis .B Returned goods costing RS.800.At the end of the accounting period i.e.on 31st december,2005 the remaining goods were neither Returned nor were approved by him the stock on approval will be shown in the balance sheet at Rs. 2,000 2,700 2,700 less 25% of 2,700 3,500 27 / 52 Q.27 On 31st dec.,2005 goods sold at a Sale price of Rs.30,000 were lying with the customers ,M to whom these goods were sold on 'Sale or Return basis ' and recorded as actual Sales.Since no consent was received from M,the adjustment entry was made presuming goods were sent on approval at a profit of cost + 20%.in the balance sheet,the stock with customers account will be shown at rs. 30,000 24,000 20,000 25,000 28 / 52 Q.26 Under sales on return or approval basis, when transactions are numerous the seller while sending the goods treats then as : An ordinary sale but no entry is passed in the books An ordinary sale and entry for normal sale is passed in the books Approval sales and no entry is passed None of the above 29 / 52 Q.25 Which types of account is sale or return day book Personal A/c Suspense A/c Memorandum A/c Nominal A/c 30 / 52 Rs.500 Nil Rs.260 None of the above 31 / 52 Q.23 A merchant sends out his goods casually to his dealers on approval basis. All such transaction are, however, recorded as actual sales and are passed through the sales book. On 31.12.2008, it was found that 200 article at a sale price of 200 each sent on approval basic were recorded as actual sales at that price. The sale price was made at cost plus 25% . The amount of stock on approval will be Rs.32,000 Rs.40,000 Rs. 30,000 None of the above 32 / 52 Q.22 In case business sends goods casually, If customers returns the goods on a subsequent date, which entry has to be passed : Return in inwards a/c Dr. To Debtors a/c Sale a/c Dr. To Customers a/c No entry None of these 33 / 52 Q.21 when Sales or return day book & sales or return ledgers are maintained & the goods are approved by the customers ,these are recorded Initially in the Sale or Return Ledger .Thereafter , in the Sale or Return Day Book only in the sales or return day book only in the Sale Day Book both in the sales or return day book & sales day book 34 / 52 Q.20 When the goods are returns by the customers within the specified time ,they are recorded Initially in the Sale or Return Ledger .Thereafter , in the Sale or Return Day Book Initially in the Sale or Return Day Book .Thereafter , in the Sale or Return Ledger only in the Sale or Return Day Book only in the Sale or Return Ledger 35 / 52 Q.19 which of the following is not a main column of Sales or Return journal ? goods sent on approval column goods Returned column goods approved column purchase column 36 / 52 Q.18 A company sends its cars to dealers on 'Sale or Return' basis .All such transactions are, however recorded as actual Sales and passed through the Sales book. Just before the end of financial year , two cars which had cost RS.55,000 each have been sent on Sale or Return basis and have been debited to customers account at Rs.75,000 each, cost of goods lying with the customers will be Rs.1,10,000 Rs.55,000 Rs.75,000 None of these 37 / 52 Q.17 A merchant sends out his goods casually to his dealers on approval basis .All such transactions are, however recorded as actual Sales and passed through the Sales book On 31-12-2005,it was found that 100 articles at a Sale price of 200 each sent on approval basis were recorded as actual Sales at that price .The Sale price was made at cost + 25 % . The amount of stock on approval will be amounting. to Rs. 16,000 20,000 15,000 15,000 38 / 52 Q.16 The customer returned 20% of the goods on 31st March 2006 Rs.2,00,000 Rs.2,80,000 Rs.2,16,000 Rs.2,64,000 39 / 52 Q.15 There was no communication from the customer Rs.2,00,000 Rs.2,80,000 Rs.3,00,000 Rs.1,80,000 40 / 52 Q.14 The customer returned 20% of the goods approval 80% of the remaining goods on 31st march, 2006 Rs.2,16,000 Rs.2,12,800 Rs.2,00,000 Rs.2,28,000 41 / 52 Q.13 The customer returned 20% of the goods an approved the balance on 31st March, 2006 Rs.2,16,000 Rs.2,80,000 Rs.3,00,000 Rs.1,80,000 42 / 52 Q.12 The customer approved 80% of the goods on 31st March,2006 Rs.2,16,000 Rs.2,80,000 Rs.3,00,000 Rs.1,80,000 43 / 52 Q.11 Mr. P sent goods worth Rs.50,000 on 11th March on reject or approval basis. Out of which goods worth Rs.30,000 were accepted by the customers till 31st March and the remaining were still pending with the customers as on 31st March. How would you deal with the goods lying with the customer as on 31st March. Assumption 25% profit on cost -- Deduct Rs.20,000 from sales and debtors and include goods worth Rs.16,000 in closing stock Deduct Rs.50,000 from sales and debtors and include goods worth Rs.20,000 in closing stock. Deduct Rs.50,000 from sales and debtors and include goods worth Rs.16,000 in closing stock. Deduct Rs.20,000 from sales and debtors and include goods worth Rs.20,000 in closing stock.Assume profit on sales is 20% 44 / 52 Q.10 Mr.Z sent goods worth Rs.50,000 on 1st march on reject or approval basis. Goods worth Rs.25,000 were still pending with the customer on 31st March and the remaining goods were accepted by the customer.How Would you deal with the goods lying with the customers as 31st March . Assuming that the goods were invoiced at 25% above the cost price Deduct Rs.25,000 from Sales and debtors and include goods wroth Rs.20,000 in closing stock. Deduct Rs.50,000 from sales and Debtors and include goods worth Rs.25,000 in closing stock. Deduct Rs.50,000 from sales and Debtors and include goods worth Rs.25,000 in closing stock. Deduct Rs.25,000 from sales and Debtors and include goods worth Rs.20,000 in closing stock. 45 / 52 Q.9 Under Sales or Return or approval basis, when transactions are moderate , & the seller, sends the goods on approval or return basis,the accounting treatment will be No journal entry entry in sales or return journal entry in sales or return day book Sundry Debtors account -Dr To Sales account 46 / 52 Q.8 In Sale or Return ledger All the customers are individually debited and the sale or return account is credited with the periodical total of the Sale or Return Day Book All the customers are debited in total and the sale or return account is credited with the periodical total of the Sale or Return Day Book All the customers are individually debited and the sale or return account is credited with the individual total of the Sale or Return Day Book None of these 47 / 52 Q.7 A trader has credited certain items of Sale on approval aggregating Rs.60,000 to Sales account .Of these ,goods of the value of Rs.16,000 have been Returned and taken into stock at cost Rs.8,000 though the records of Return was omitted in the accounts .In respect of another parcel of Rs.12,000 (cost being Rs.6,000) the period of the approval did not expire on closing date . Cost of goods lying with the customers should be Rs.12,000 Rs.54,500 Rs.6,000 None of these 48 / 52 Q.6 A trader has credited certain items of sales on approval aggregating Rs.60,000 to Sales Account. Of these, goods of the value of Rs.16,000 have been returned and takes into stock at cost Rs.8,000 though respect of another parcel of Rs.12,000 (cost being Rs.6,000) The period of approval did not expire on the closing date. Cost of goods lying with customers should be Rs.12,000 Rs.54,000 Rs.6,000 None of the above 49 / 52 Q.5 Under Sales or Return or approval basis, when transactions are large , & the seller, sends the goods on approval or return basis,the accounting treatment will be No journal entry entry in sales or return journal entry in sales or return day book Sundry Debtors account -Dr To Sales account 50 / 52 Q.4 Which of these statements is not true? Goods lying with the customers are valued at Cost price Sale and return book is used when the goods are either approved or rejected Sale or return ledger is a Kaccha ledger Sales or return day book is customer's record 51 / 52 Q.2 Sale or Return Day Book and Sale or return Ledger is known as - Principal books Subsidiary books Memorandum books None of the above 52 / 52 Q.1 Under Sales or Return or approval basis, when transactions are few &,the seller, at the end of the accounting year reverse the Sale entry , then what will be the accounting treatment for the goods Returned by the customers on a subsequent date no entry will be passed in the books for such Return of goods entry for such Return of goods will be passed by the seller only the stock account will be adjusted None of these Your score is LinkedIn Facebook Twitter VKontakte
