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unit-10-consignment-accounts-i

Unit-10 Consignment Accounts-I

Learn about various concepts relating to consignment and the basic framework of accounting for consignment transactions.

Explain why the consignee does not pass any entry for a) Goods sent on Consignment, b) Profit or loss on consignment, c) Closing stock.




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Learning Pundits Content Team

Written on Apr 16, 2019 4:58:33 PM

a) Goods sent on Consignment

Goods Sent on Consignment Account: This is a real account. It deals with the goods transferred from the consignor to the consignee and goods returned by the consignee to the consignor. All the goods consigned by the consignor will be credited lo this account and the goods returned by the consignee are debited to this account. The balance represents the cost of goods with consignee for sale, and is transferred to the Trading Account.

b) Profit or loss on consignment

Profit or Loss on consignment: No entry is passed for profit or loss on consignment as the consignee is not concerned with it.

c) Closing stock

Closing entry for goods sent on consignment : Goods sent on Consignment Account is closed by transfer to the Trading Account. The entry passed is as follows:

Goods Sent on Consignment A/c  Dr.

To Trading A/c

(Being goods sent on consignment account closed)