Consignment

Consignment is a process in which goods are sent to consignee by consignor for sale purpose.

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.

Inward Consignment

A consignment from consignee’s point of view is called inward consignment.

It is referred to as inward once the receipt of the number of goods is created for the purpose of sale.Goods sent on consignment don't become the property of the receiver. He has not bought them. The ownership remains with the sender o the consignor. If the products ar destroyed, the receiver (consignee) is nor the least bit responsible. The loss can fall on the shipper. The consignee tries to sell the products per the directions of the shipper. once the products are sold , he can deduct his expenses, commission etc., from the sale return and also the balance is remitted to the consignor. the link between the consignor and also the consignee is that of principal and agent.The receiver is that the agent. The receiver acts entirely on behalf of the shipper.The consignee is entitled to his remuneration that is mostly fastened on the premise of a commission on sales. The expenses incurred by the consignee should even be reimbursed by the principal. the coed should remember that the consignee doesn't get the goods; he simply receives the possession of products. Therefore, such merchandise need special treatment in accounts.

Outward Consignment

A consignment from consignor’s point of view is called outward consignment.

 OR

Dispatch of goods for consignor to consignee is called consignment outward

Parties in Consignment Account

Two parties are involved in Consignment Account

Consignor 

Consignee

 

Consignee

A person who receives the goods from consignor for sale on commission is called consignee.

In a contract of carriage, the consignee is that the person to whom the cargo is to be delivered whether or not by land, sea or air.

If sender dispatches an item to receiver via a delivery service, sender is that the consignor and recipient is that the Consignee.

This is a difficult space of law in that it regulates the mass transportation trade that cannot forever guarantee arrival on time or that product won't be broken within the course of transit. what is more, two other issues ar that unpaid consignors or freight carriers may wish to carry goods till payment is formed, and dishonorable people might request to take delivery in situation of the legitimate consignees. The key to resolving such disputes lies within the documentation. the quality type of contract may be a bill of lading that, in international shipping law, is just a contract for the carriage of goods entered into between the shipper and also the carrier that's not a charter party. it's forever a term of that contract that the carrier should deliver the goods to a specific receiver.

Consignor

A person who sends goods to the agent (consignee) for sale on commission is called consignor.

The shipper, in a contract of carriage, is that the person sending a cargo to be delivered whether by land, sea or air. Some carriers, like national postal entities, use the term "sender" or "shipper" however within the event of a legal dispute the proper and technical term "consignor" will generally be used.

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