Accounting Entries For Consignment Accounting

November 10th, 2009 Comments off
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Below is a snapshot of accounting entries for consignment accounts in the form of journal entries format:

ACCOUNTING ENTRIES FOR CONSIGNMENT ACCOUNTING

Debit($)

Credit($)
Consignment Account

XX

Goods sent on Consignment Account

XX

Relate to COST of goods sent on consignment. If goods are invoiced to the consignee at selling price, only the cost price should be debited to the Consignment Account

Debit($)

Credit($)
Consignment Account

XX

Cash Account/Personal Account

XX

Relate to EXPENSES paid or payable by consignor

Debit($)

Credit($)
Consignment Account

XX

Consignee’s Account

XX

Relates to EXPENSES paid by CONSIGNEE

Debit($)

Credit($)
Consignee’s Account

XX

Consignment Account

XX

On receipts of gross proceeds of cash and credit sale where credit sales are SUBJECT to a del credere agreement

Debit($)

Credit($)
Consignee’s Account

XX

Consignment Account ( with gross proceeds of cash sales)

XX

Consignment Debtors Account

XX

Consignment Account (with credit sales)

XX

Consignee’s Account

XX

Consignment Debtors Account ( cash collected by consignee from consignment debtors)

XX

On receipts of gross proceeds of cash and credit sales where credit sales are NOT SUBJECT to a del credere agreement

Debit($)

Credit($)
Consignment Account

XX

Consignee’s Account

XX

Relates to COMMISSION  due to consignee on sale

Debit($)

Credit($)
Consignment Account

XX

Income Statement

XX

Relates to PROFIT on consignment for the period

Debit($)

Credit($)
Cash or Bills Receivable Account

XX

Consignee’s Account

XX

Relates to any cash or bill receivable in settlement

Debit($)

Credit($)
Goods sent on Consignment Account

XX

Purchases Account

XX

Relates to COST of goods sent on consignment for the period
Notes:

  1. If goods are damaged or lost in transit, the Consignment Account should be credited and the uninsured loss debited to the Income Statement. Where the loss is covered by insurance, the amount will be credited to Consignment Account and debited to Insurance Account
  2. Where goods are partly sold at the date of rendering the Account Sales, the unsold stock should be brought down as a balance on the Consignment Account. The stock is valued at the cost prie of the goods plus a proportion of all expenses incurred in getting the goods into a saleable condition, e.g. freight, insurance, storage but not commission. If the net realizable value is lower than cost plus proportionate expenses the stock should be valued at net realizable value. The stock value be shown as an asset in the Balance Sheet.

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Financial Accounting

 
 

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