Consigment Account

CONSIGMENT ACCOUNTS
of business, every manufacturer of exporter or wholesaler tries his best to sell his ' and abroad to a larger extent. But it is not an easy task, because a businessman [information about the demand of his product in different parts of the country and methods by which businessmen can increase the sale of their products, (1) by in different parts of the country and abroad (2) by appointing agents in their [ abroad. The first method is very expensive because a large sum of money is spent t«f a branch and a number of persons are required as, manager, clerks, accountant etc. t operations of the branch. Inspite of spending such a heavy amount, the branch may die profit earned by the branch may be very small as compare to the amount
[ method is concerned, the manufacturer or wholesaler just appoints an agent whoon the risk of the former. The agent is paid commission which is generally a> by him. This is comparatively a cheaper method by which sales can be promoted,i very useful due to the knowledge of the agent of the local conditions. The agenti in the best possible manner and will remit the sale proceeds of the goods afterlib own commission to the manufacturer or wholesaler. -
1 act of sending the goods by the owner (manufacturer or whole sailer) to his > etBect, store and sett them on the risk and behalf of the owner oh commission
r wholesaler who sends his good for sale is known as 'Consignor* and the person sent is known as the 'Consignee'. The relationship between consignor and . and Agent* and not that of seller and buyer. It should be noted, carefully, tthe buyer, he merely possesses the goods on behalf of the consignor. He is liable to ; consignor only to the extent the goods he has sold. Unsold goods belong to the I by the consignee at the risk of the consignor.
r dispatched by the consignor to the consignee, it will be a 'Consignment Outward' : and 'Consignment Inward* from consignee's view point.
1 have a number of agents in different parts of the country or abroad to whom he , it will be very useful for him to maintain a separate subsidiary register (journal) t record of the goods consigned. This special register is named as "Consignment i'. Accounting treatment of this book is similar to that of a sales book. On the ay have a number of consignors from whom he receives goods for sale, so it will him to maintain a separate subsidiary register named as 'Consignment Inward r wiving the problems in the examination Journal is used for recording consignment
sent by the cdnsigner to the consignee, he has to incurred some expenses On the is carriage, dock dues, import duty, transportation, godown rent, Insurance etc. It that .generally all the expenses either paid by the consignor himself or by the tly the consignor. The consignee will neither bear any expense or loss nor he will share ale of godds. He will just receive his commission from the consignor