You know for each consignment, the Consignor prepares the Consignment Account, the Goods Sent on Consignment Account and the Consignee’s Account in his books, whereas the consignee prepares the Consignor’s Account and the Commission Account in his books. Sometimes, you may be asked to prepare the ledger accounts directly i.e., without passing any journal entries, You should therefore learn how to prepare these accounts directly.

You should debit the Consignment Account with the cost of goods consigned, expenses incurred by the consignor, expenses incurred by the consignee and the Consignee’s commission; and credit it with sales (both cash and credit) and the goods returned by the Consignee. The Consignee’s Account will be debited with the sales made by him and credited with his expenses, commission and the remittances made to the Consignor.

The Consignor’s Account in the books of Consignee is just the reverse of Consignee’s Account in Consignor’s books. It is debited with the expenses incurred by the Consignee, the commission due to him and the remittances made to the Consignor on account; and credited with the total amount of sales.

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