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Accounting in Consignee's Books 🧾

The Consignee (Agent) does NOT own the goods. So, he does NOT open a Consignment Account. He only cares about:

  1. Money he owes to Consignor (Sales).
  2. Money Consignor owes him (Expenses + Commission).

He opens only one major account: Consignor's Personal Account.

Key Journal Entries 📝

1. Receiving Goods: NO ENTRY. (Because he didn't buy them. Just makes a note in a register).

2. Expenses Incurred:

Consignor A/c ...Dr.
    To Bank A/c
(Recoverable from Consignor)

3. Sales Made:

Bank / Debtors A/c ...Dr.
    To Consignor A/c
(Liability to pay Consignor increases)

4. Commission Earned:

Consignor A/c ...Dr.
    To Commission A/c (Income)

5. Bad Debts (If Del Credere is there):

Bad Debts A/c ...Dr.
    To Debtors A/c
(Then transfer Bad Debts to Commission A/c)
Golden Rule

For Consignee, the Consignor is a Creditor for Sales money, and a Debtor for Expenses/Commission. The net balance is paid via Bank Draft.

Quiz Time! 🎯

Test Your Knowledge

Question 1 of 5

1. Does Consignee pass entry for goods received?

Yes
No
Only if value > 1 Lakh
Sometimes

💡 Final Wisdom: "The Agent's books are simple. 'I sold this much for you, I spent this much for you, this is my fee. Here is the rest of your money. Bye!'" 👋

Next up: Valuation of Stock - The tricky part! 🧮

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