Accounting for consignment


Learning objectives:

  • What is consignment? Enlist advantages and disadvantages of consignment form of business.
  • What is proforma invoice? Who prepares a proforma invoice in consignment?
  • What is an account sales? What purpose does an account sales serve?
  • What is the difference between cost price method and invoice price method of sending goods on consignment?
  • Make journal entries and prepare necessary ledger accounts in the books of consignor as well as consignee.
  • How the stock on consignment is calculated and treated?
  • How would you explain the terms recurring and non-recurring expenses?
  • Compute the value of normal and abnormal loss in consignment.
  • What is the treatment of normal and abnormal loss in consignment?
  • What are del credere commission and overriding commission? In which situations the two types of commission are granted to consignee?
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