CONSIGNMENT ACCOUNTS-I INDEX

 

UNIT 10 CONSIGNMENT ACCOUNTS-I

Structure

10.0 Objectives

A  After studying this unit you should be able to:
·  Explain the meaning of consignment
·  Distinguish it from sale
·  Identify the parties involved in donsignment and describe their relationship
·  explain the basic framework of accounting for consignment transactions in the books of the consignor and the consignee

10.1 Introduction

The-producers often make of selling agents and distributors in their channel of distribution, this is particular true of the agricultural goods. The selling agents/ distributors act in various ways. One of the methods used is to receive the goods on consignment basis. Under this system the agent receives the goods and undertakes to sell it on behalf of the consignor. He often settles the account of the consignor after all the goods received from him have been sold. This involves certain peculiarities in accounting. In this unit you will learn about various concepts relating to consignment and the basic framework of accounting for consignment transactions in the books of the consignor and the consignee.

10.2 Concepts of Consignment
        10.2.1 What is Consignment?
        10.2.2 Parties to Consignment
        10.2.3 Features of Consignment
        10.2.4 Distinction between Sale and Consignment
        10.2.5 Important Terms in Consignment

10.3 Accounting Treatment

10.3.1 Books of Consignor
          10.3.2 Books of Consignee

10.4 Let Us Sum Up
10.5 Key Words
10.6 Some Useful Books
10.7 Answers to Check Your Progress
10.8 Terminal Questions/Exercises