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On 1st January 2018 b of Mumbai consigned 100 cases?
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On 1st January 2018 b of Mumbai consigned 100 cases?
Consigning 100 Cases by B of Mumbai on 1st January 2018
B of Mumbai is a consignor who has consigned 100 cases on 1st January 2018. Let us understand the process of consignment and the accounting treatment for the same.
What is Consignment?
Consignment is a process where a consignor sends goods to a consignee for selling on behalf of the consignor. The consignee sells the goods and pays the consignor after deducting his commission or expenses.
Accounting Treatment for Consignment
The following are the accounting entries that need to be passed for consignment:
- When Goods are Consigned: Goods sent on consignment are not treated as sales. The consignor will debit the Consignment Account and credit the Goods Sent on Consignment Account.
- When Expenses are Incurred: The consignee will incur certain expenses like freight, insurance, etc. The consignee will debit the Consignment Account and credit the respective expense account.
- When Goods are Sold: When the consignee sells the goods, he will debit the Selling Expenses Account and credit the Consignment Account. He will also debit the Consignment Account and credit the Consignor's Account for the amount payable to the consignor.
Conclusion
Thus, in this case, B of Mumbai will debit the Consignment Account and credit the Goods Sent on Consignment Account. The consignee will sell the goods, incur expenses, and pay B of Mumbai after deducting his commission or expenses.
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On 1st January 2018 b of Mumbai consigned 100 cases?
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On 1st January 2018 b of Mumbai consigned 100 cases? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On 1st January 2018 b of Mumbai consigned 100 cases? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st January 2018 b of Mumbai consigned 100 cases?.
On 1st January 2018 b of Mumbai consigned 100 cases? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On 1st January 2018 b of Mumbai consigned 100 cases? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st January 2018 b of Mumbai consigned 100 cases?.
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