Accounting Entries For Consignment Accounting

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:

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
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.