Accounting Entries in the Books of Consignor:

 

Accounting Entries in the Books of Consignor:

(1)	On dispatch of goods:-
	Consignment account	(With the cost of goods)
	To Goods sent on consignment account
(2)	On payment of expenses on dispatch:-
	Consignment account	(With the amount spent as expenses)
	To Bank account
(3)	On receiving advance:
	Cash or bills receivable account	(With the amount cash or bill)
	To Consignee's personal account
(4)	On the consignee reporting sale (as per A/S):-
	Consignee's personal account	(With gross proceeds of sales)
	To Consignment account
(5)	For expenses incurred by the consignee (as per A/S):-
	Consignment account	(With the amount of expenses)
	To Consignee's personal account
(6)	For commission payable to the consignee:-
	Consignment account	(With the amount of expenses)
	To Consignee's personal account
Assuming that all the goods sent have been sold, the consignment account will show at this stage the actual profit or loss made on it. The same is transferred to profit and loss account. The entry in case of profit is:
	Consignment account
	To profit and loss account
In case of loss the entry is:
	Profit and loss account
	To Consignment account
Note: The goods sent on consignment account may be closed by a transfer to trading account.
When Consignment is Partly Sold: When all the goods sent on consignment have not been sold., the value of unsold goods in the hands of the consignee must be ascertained and the profit or loss should be found out by taking this stock into account. The entry is:
	Stock on consignment account
	To Consignment account
	Stock on consignment account is an asset and will be shown in the balance sheet of the consignor. Valuation of stock is discussed on valuation of stock page.