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When Consignor sends the goods to Consignee,the entry is Consignment A/c Dr. To Goods sent on consignment A/c Here,Why Consignment A/c is debited?. It should be Consignee A/c debited because he is the receiver of goods and consignment A/c is debited when there is an expense and there is a separate entry for Expenses incurred where consignment A/c is Debited but my question is Why Not Consignee Account should be debited here, he is the receiver Na?
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When Consignor sends the goods to Consignee,the entry is Consignment A...
Why is Consignment Account Debited When Sending Goods on Consignment?

Introduction:
When goods are sent on consignment, the consignor keeps the ownership of the goods until they are sold by the consignee. The consignee only takes possession of the goods and sells them on behalf of the consignor. In this transaction, the consignor debits the consignment account and credits the goods sent on consignment account. But why does the consignment account get debited?

Explanation:
The reason why the consignment account is debited is that it is a nominal account and follows the rule of "Debit all expenses and losses". Since the goods sent on consignment are not sold yet, they are not generating any revenue for the consignor. Therefore, the cost of sending the goods on consignment is treated as an expense for the consignor. Hence, the consignment account is debited.

Why Not Consignee Account Debited?
The consignee account is not debited because the consignee is not buying the goods. They are only taking possession of the goods and selling them on behalf of the consignor. Therefore, the consignee is not incurring any cost or expense in this transaction. Hence, it is not appropriate to debit the consignee account.

Separate Entry for Expenses:
If any expenses are incurred while sending the goods on consignment, a separate entry is made to debit the consignment account. This is because the expenses are related to the consignment and not the consignee. The entry would be "Expenses A/c Dr. To Consignment A/c".

Conclusion:
In conclusion, the consignment account is debited when goods are sent on consignment because it is a nominal account and follows the rule of "Debit all expenses and losses". The consignee account is not debited because the consignee is not buying the goods. If any expenses are incurred, a separate entry is made to debit the consignment account.
Community Answer
When Consignor sends the goods to Consignee,the entry is Consignment A...
Consignee is not the receiver of the goods because the goods still belong to consignor.There is no entry passed in the consignee's book for the same.The goods sent on consignment is an expenditure related to consignment.
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When Consignor sends the goods to Consignee,the entry is Consignment A/c Dr. To Goods sent on consignment A/c Here,Why Consignment A/c is debited?. It should be Consignee A/c debited because he is the receiver of goods and consignment A/c is debited when there is an expense and there is a separate entry for Expenses incurred where consignment A/c is Debited but my question is Why Not Consignee Account should be debited here, he is the receiver Na?
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When Consignor sends the goods to Consignee,the entry is Consignment A/c Dr. To Goods sent on consignment A/c Here,Why Consignment A/c is debited?. It should be Consignee A/c debited because he is the receiver of goods and consignment A/c is debited when there is an expense and there is a separate entry for Expenses incurred where consignment A/c is Debited but my question is Why Not Consignee Account should be debited here, he is the receiver Na? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about When Consignor sends the goods to Consignee,the entry is Consignment A/c Dr. To Goods sent on consignment A/c Here,Why Consignment A/c is debited?. It should be Consignee A/c debited because he is the receiver of goods and consignment A/c is debited when there is an expense and there is a separate entry for Expenses incurred where consignment A/c is Debited but my question is Why Not Consignee Account should be debited here, he is the receiver Na? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for When Consignor sends the goods to Consignee,the entry is Consignment A/c Dr. To Goods sent on consignment A/c Here,Why Consignment A/c is debited?. It should be Consignee A/c debited because he is the receiver of goods and consignment A/c is debited when there is an expense and there is a separate entry for Expenses incurred where consignment A/c is Debited but my question is Why Not Consignee Account should be debited here, he is the receiver Na?.
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