Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

Refer to Source A3 in the insert.
(a)[4]

Explain two disadvantages to a consignor of selling on a consignment basis.

(b)[10]

Prepare the consignment account in Tan’s books for the year ended 31 March 2021.

(c)[6]

Explain three reasons why Tan charges a lower selling price for the motors in the consignment sales.

(d)[5]

Advise Tan on whether he ought to establish a company in country B to sell his products. Justify your answer.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: Reduced control / greater risk of inventory loss

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