Events in the Books of the Consignee

Introduction

A consignee is a party that obtains goods from a particular owner. He then holds these goods for the owner and sells them at the appropriate time. In simple words, the process where an entity that owns the goods of consignment and remains in an agreement to sell those goods for the owner (consignor)  is called a consignment. 

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Meaning of Consignee

The meaning of consignee is evident from the above definition. The particular arrangement in which a consignor and consignee are involved is called a consignment. This is a well-known business practice in the retail industry. In this context the meaning of consignment is important. 

Accounting Entries in the Book of the Consignee

No entries will be made in the consignee’s book for the goods in shipment or transit that have been sent by the consignor. This also involves different expenses that are handled by the consignor. However, the advance given to the consignee, expenses incurred and sales made concerning the consignment as well as commission earned should be properly recorded. A consignee is often allowed the commission of del credere to the instead of the usual ordinary commission. In the following section, the journal entries in the books of the consignor and consignee have been provided. 

Journal Entries in the Books of the Consignee

In exchange for the selling of goods of consignment for the consignor, a consignor is bound to obtain a predefined sales commission. Concerning all the different costs involved in journal entries in the consignee’s books, maintenance of all accounts within the book is important. A proper journal entry in the books of the consignee has been presented below.