Unit-10 Consignment Accounts-I

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

Distinguish between Account Sales and Sales Account?

What is an 'account sales'? How do you prepare it? State how it is useful to the consignor?

Under what circumstances can the consignee get a special commission?

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

"Consignment is the same thing as sale". Discuss.

Distinguish between a) Non-recurring and Recurring Expenses, b) Ordinary Commission and Del Credre Commission, c) Account Sales and Invoice.

"Consignment is the same thing as sale". Discuss.

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When goods are sent by manufacturer or a trader to an agent to be sold by him on commission basis and at the risk and account of the former, they are said to be sent on consignment. In other words a producer/trader forwards his products to his selling agents, appointed at different places, to sell them on his behalf for an agreed commission.
The process of sending goods on this basis by one firm to another for sale is known as 'Consignment' and this transaction is called a 'Consignment Transaction'. The consignment is 'Outward Consignment' for the person who sends the goods and an 'Inward Consignment' for the person who receives the goods for sale.