Consignment Account

An account which is prepared to record consignment transaction is called consignment account.

Consignment is that the act of consigning, which is placing any material within the hand of another, but retentive ownership till the goods area unit sold or person is transferred. this may be done for shipping, transfer of goods to auction, or for sale in a very store (i.e., a consignment shop). To consign means to send and therefore consignment means sending product to another person. in case of consignment goods area unit sent to the agent for the aim of sale. The possession of these product remains with the sender. The agent sells the goods on behalf of the sender, in step with his instructions. The sender of products is thought as consignor and the agent is thought as the receiver.

Features of consignment are:

•     The relation between the two parties is that of consignor and receiver and not that of buyer and seller
•     The consignor is entitled to receive all the expenses in connection with consignment
•     The consignee isn't liable for harm of goods during transport or the other procedure product are sold at the chance of consignor. The profit or loss belongs to consignor solely