STOCK KINDS

ABNORMAL LOSS OF STOCK:
Any abnormal loss e.g. loss due to fire, accident, theft, negligence, etc. will be treated in the books of consignor in such a manner that consignment profit is not reduced. While calculating the value of loss, proportionate expenses up to the time of occurrence of loss are included.
NORMAL LOSS OF STOCK:
A loss which occurs due to natural causes e.g. normal leakage, loss in weight due to nature of goods, etc. is termed as 'normal loss1. Such loss inflates the value of closing stock. VALUATION OF CLOSING STOCK WITH CONSIGNEE:
Closing stock with consignee is valued at cost or market price whichever is less. To ascertain cost proportionate non-recurring expenses are included in the value of stock. Non-recurring expenses will include all such expenses, which have been incurred up to the time goods have reached to agent's selling place e.g. freight, cartage, transit insurance, octroi, import duty, customs charges, packing, etc. will be [included for stock valuation. Expenses like godown rent, godown insurance, sales expenses are not rhided in the value of stock. Market value is the net realizable value i.e. sales commission and other
ihie sales expenses are deducted from the market value on the closing date. ;{j) OVERRIDING COMMISSION:
Extra commission is normally granted by the consignor when he desires his agent to work hard to posh a new line of product in the market.
! CONSIGNOR'S BOOKS:
As already stated the goods sent by the consignor are sold on his behalf therefore he would iike to the profit earned or loss suffered from each different consignment. Before we discuss the entries in books of the consignor it is helpful to understand the nature of the following:
tNSIGNMENT ACCOUNT:
This is by nature a profit & Loss Account. One separate account is devoted to each different signment with the heading "Consignment to ... account". Actually the consignment account is a rieular Trading and Profit and Loss Account. All expenses specially related to the consignment must debited to the concerned consignment account whether incurred by the consignor or by the consignee all revenues (goods sold by the consignee and unsold goods with the consignee) should be credited to account. The difference between the two sides of this account will show the result of that particular iignment.
ISIGNEE'S ACCOUNT:
This is a personal account. It should be noted that the consignee is not the buyer. His personal it, therefore, is not debited when goods are sent to him. In cases where it is customary for the signce to send some money as an advance against the consignment the payment is merely an advance way of security) and not a part payment. Hence the advance received from the consignee should be :d to the credit side of consignee's personal account. In case part of the stock is still lying unsold the jrtionate amount of advance should be carried down as credit balance in consignee's personal account. :ase where consignor draws a bill on consignee the bill is known as a documentary bill.