Consignment Accounts

Business: A legal activity which is carried out for the purpose of earning profit is called  business.

=> Expansi Ex pansion on of busine bu siness ss: Building 

Dividing in to departments

For making Departments  purpose

Capital



Branches Large Capital is required Building

For making Branches purpose

Staff is required Skilled Labour is required

Consignment: “The Act of sending the goods from manufacturer (Owner) to a person (Agent) for  the purpose of sale on the behalf of owner.” Two Parties of the Consignment: 1. Consignor 

Principal

2. Consignee

Agent



Consignee takes his own commission. Sending goods

Performa Invoice Consignor

Consignee Account Sales

Performa Invoice: A Document prepared and send by consignor to consignee is called Performa invoice. Section of Performa Invoice: 1) Quanti Quantity ty of goods goods suppl supplied ied to to Consign Consignee ee 2) Qual Qualit ity y of of goo goods ds 3) Desc Descri ript ptio ion n of goods goods

4) Price of goods Account Sale Performa: A Document prepared and send by the consignee to the consignor after the sale of goods is called Account Sale Performa. Section of Account Performa 1) Goods sold 2) Amount Realized 3) Expenses, Commission 4) Net amount due to Consignor 

Commission Normal commission = which is actually paid to consignee Overwriting Commission = which is offered to consignee in the way of large no. sales Exmp: good of Rs/- 100 sold in Rs/-125 Del-Credit Commission = which is offered to consignee to save or recover the debts from account receivable.

Consignment Account Expenses----------Consignment a/c Income -----------Consignment a/c Consignor Book 1. When goods send to consignee Consignment a/c To goods sent on consignment a/c 2. Expenses paid by Consignor  Consignment a/c Cash a/c

DR  CR  Consignee Book  No Entry DR   CR 

DR  CR

3. When advance amount received by consignor  Cash/ Bank/ Bill receivable DR To Consignee CR When Expenses Paid By Consignee Consignment a/c DR To Consignee CR CR 

No Entry

Consignor a/c To Cash/ Bank/ Bill Payable

DR   CR  

Consignor a/c Cash a/c

DR  

4.

5. Goods Sold By Consignee Consignee a/c Consignment a/c

6.

When Commission is recorded Consignment a/c Consignee a/c

DR CR

DR CR

7. When Stock On Consignment is recorded

Cash a/c Debtor a/c Consignor a/c

DR  DR 

Consignor a/c Commission a/c

DR  CR 

CR 

Stock on consignment a/c To Consignment a/c

DR   CR

No Entry

Consignment Account

Profit

Loss

In the case of Profit Consignment a/c DR   Profit & Loss a/c

CR  

In the case of Loss Profit & Loss a/c DR  Consignment a/c

CR 

When goods send on Consignment a/c Closed Goods Send On Consignment a/c To Trading A/c

DR   CR