Coupon Accepted Successfully!


Accounting Treatment in the Books of the Consignor

Consignor can have multiple consignees and for each consignee, the consignor will open two additional ledger accounts to record all consignment transactions, which are as follows:

Consignment Account:

  • This account is prepared in the books of consignor
  • It is nominal account in nature. The rule for nominal account – debit all expenses and losses and credit all incomes and gains are applicable here.
  • Consignment account is debited with the cost of goods consigned, expenses incurred by the consignor and expenses of the consignee
  • It is credited with sale proceeds, abnormal loss, closing stock and the cost of goods returned by the consignee
  • Excess of credit over the debit side total will result in profit and such profit is transferred to Profit and Loss account of the consignor
  • The format of consignment account is as follows:


Whenever there is a question on finding out the profit on consignment, always prepare consignment account. Do not use shortcut method of adding and subtracting the incomes and expenses. You might miss on the closing stock.

Consignee’s Account:

  • Consignee account is a personal account
  • The rule for personal account – Debit the receiver and credit the giver is applicable here
  • This account is prepared to record all the transactions of consignee and to find out the balance of consignee account

Journal entries in the books of the consignor


Test Your Skills Now!
Take a Quiz now
Reviewer Name