consignment accounts.pptx

Accounting of consignment ppt

1. Unit 2 Consignment

2. Consignment Consignor Goods Consignee (owner of the goods or producer) Consignment Agent to sell Consignor expenses Cost of material Packing, Loading/ Freight Transit insurance, Duty/Tax, other expenses Consignee expenses: Non Recurring expenses (unloading/freight/ duty/tax) Recurring Expenses (Rent, salary, advertisement, insurance, other expenses) Commission (simple, Delcredere, Over-riding) sales Commission (simple, Delcreder , Over-riding) Net sale proceeds to consignor Consignment account Goods sent on consignment account Consignees account Consignor account Commission account

3. Sr.No . In the Books of Consignor Dr Cr In the Books of Consignee Dr Cr 1 When goods are sent to the consignee Consignment A/c Dr To Goods Sent on Consignment A/c (Being Goods Sent on Consignment) Xx xx No need to do any Entry in this case 2 Expenses Incurred by Consignor Consignment A/cDr To Cash/Bank A/c (Being Expenses incurred on consignment) Xx xx Not Applicable 3 Advance given by consignee Cash/Bank A/ cDr To Consignee’s A/c (Being advance received from consignee) Xx xx Consigner A/ cDr To Bank/Cash A/c (Being Advance amount paid to Consignor) Xx xx 4 Expenses Incurred by Consignee Consignment A/cDr To Consignee’s A/c (Being Expenses incurred by consignee) Xx xx Consigner A/ cDr To Bank/Cash A/c (Being Expenses incurred on goods received on consignment) Xx xx 5 Sale by Consignee Consignee’s A/cDr To Consignment A/c (Being Expenses incurred by consignee) Xx xx Cash (for cash sale) A/ cDr Debtors (for Credit Sale) A/c Dr To Consignor A/c (Being goods sold) Xx xx 6 Commission to Consignee Consignment A/cDr To Consignee’s A/c (Being Commission on sale due to consignee) Xx xx Consigner A/ cDr To Commission A/c (Being Commission earned) Xx xx 7 Remittance from Consignee Cash/Bank A/ cDr To Consignee’s A/c (Being due amount received from consignee) Xx xx Consigner A/cDr To Bank/Cash A/c (Being Balance due Payment made to consignor) Xx xx 8 Entry for Profit on Consignment Profit & Loss A/cDr To Consignment A/c (Being Profit earned on consignment) Xx xx Not Applicable 9 Loss on Consignment Consignment A/cDr To Profit & Loss A/c (Being Loss incurred on Consignment transferred to the profit & Loss Account) Xx xx Not Applicable

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