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Consignment accounting Basic Terminologies of Consignment
Last Updated On: 27-Oct-2021Posted On: 27-Oct-2021
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Features: 1. Two Parties: Consignment accounting mainly involves two party’s consignor and consignee. 2. Transfer of Procession: Procession of goods transferred from consignor to consignee. 3. Agreement: There is a pre-agreement between the consignor and consignee for terms and conditions of the consignment. 4. No Transfer of Ownership: The ownership of goods remains in the hands of the consignor until the consignee sells it. The only procession of goods is transferred to a consignee. 5. Re-Conciliation: At the end of the year or periodic intervals consignor sends Proforma invoice while consignee sends account sale details and both reconcile their accounts 6. Separate Accounting: There is independent accounting done of consignment account in the books of consignor and consignee. Both prepare consignment account and record the journal entries of goods through consignment account only.
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