Page 160 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Chapter 7

Accounting for consignment inventory

Have risks and

rewards

transferred to
dealer?

YES NO

Manufacturer: Manufacturer:

 Records the sale  No sale

Dr Receivable  Inventory held on SOFP
Cr Revenue

 No inventory held

Dealer:

Dealer:  No entries in
books
 Records the
purchase  No purchase. No
Dr Purchases inventory held.

Cr Payables
 Inventory
recorded by dealer

Dr Inventory
Cr Cost of sales

152