CONSIGNMENT

CHAPTER 6
ALLAN R. DREBLIN
 Nature of consignment
Consignment

Owner Agent
(Consignor) (Consignee)
Goods

Legal title
(retained by the owner
until their sale)
Consignor Reason:
1. Wider marketing area.
2. Selling specialists.
- ex the sale of stock
- consignee receives comissions
(percentage of sales price or fixed amount
for each unit of goods sold).
3. The retailing selling price can be
controlled by the consignor.
Consignee Reasons:
1. Protecting consignee from loss of selling
the product for the first time.
2. The risks of physical deterioration and
price fluctuation are avoided.
3. Reducing working capital requirements.
 Consignee Rights:
1. Reimbursement for necessary
expenditures.
2. Compensation for sales.
3. Right to offer the customary warranties on
goods.
 Consignee’s duties
1. Protect the goods.
2. Sell the goods at authorized price (or at a
price that satisfy the interests of principal).
3. Keep goods of the consignor apart from
other merchandise.
4. Report regularly on the progress of
consignment sales.
Accounting For The Consignment

• Separating consignment transactions and

profit with regular sales.

• Merging consignment transactions and

profit with regular sales.
 Consignee's Books

Separate Books No Separate

Books
JUNE 6: memorandum memorandum

(1) Shipment
of 10 radio
sets on
consignment,
cost to
consignor,
$50 each
 Consignee's Books

Separate Books No Separate

Books
JUNE 6: NO ENTRY NO ENTRY

(2) EXPENSE
OF
CONSIGNOR
IDENTIFIED
WITH
CONSIGNMEN
T.FREIGHT TO
CONSIGNEE
 Consignee's Books

Separate Books No Separate

Books
JUNE 6-JULY CONSIGNMENT IN $25 Western co, $25
20: Cash $25 Cash $25
(3) EXPENSE
OF
CONSIGNEE
CHARGEABLE
TO ACCOUNT
OF
CONSIGNOR:
FREIGHT IN
$25
 Consignee's Books

Separate Books No Separate

Books
JUNE 6-JULY CASH $850 CASH $850
20; CONSIGNMENT IN $850 SALES $850
(4) Sales of sets PURCHASE $680
for cash, 10 at WESTERN CO $680
$85, or $850
(charge by
consignor in
sales price, $850,
less 20%
commission,
$170, 0r $680
 Consignee's Books

Separate Books No Separate

Books
JULY 20 CONSIGT IN $170 NO ENTRY
(5) CHARGE COMMISION ON CONS
BY SALES $170
CONSIGNEE
FOR
COMMISSION
ON SALES,
$20% OF $850,
OR $170
 Consignee's Books

Separate Books No Separate

Books
JULY 20: CONSIGNT IN $655 WESTERN CO. $655
(6) CASH $655 CASH $655
REMITTANCE
IN
SETTLEMENT
OF ACCOUNT
TOGETHER
WITH
ACCOUNT
SALES
RENDERED BY
CONSIGNEE
 Consignor's book

Separate Books No Separate

Books
JUNE 6: CONSIGNT OUT $500 memorandum
MERCHANDISE SHIPMNT
(1) Shipment ON CONSIGNMT $500
of 10 radio
sets on
consignment,
cost to
consignor,
$50 each
 Consignor's book

Separate Books No Separate

Books
JUNE 6: CONSIGNMT OUT $60 NO ENTRY
FREIGHT OUT $60*
(2) EXPENSE
OF
CONSIGNOR
IDENTIFIED
WITH
CONSIGNM
ENT.FREIGH
T TO
CONSIGNEE
 Consignor's book

Separate Books No Separate

Books
JUNE 6-JULY NO ENTRY NO ENTRY
20:
(3) EXPENSE
OF
CONSIGNEE
CHARGEABLE
TO ACCOUNT
OF
CONSIGNOR:
FREIGHT IN
$25
 Consignor's book

Separate Books No Separate

Books
JUNE 6-JULY NO ENTRY NO ENTRY
20;
(4) Sales of sets
for cash, 10 at
$85, or $850
(charge by
consignor in
sales price, $850,
less 20%
commision,
$170, 0r $680
 Consignor's book

Separate Books No Separate

Books
JULY 20 NO ENTRY NO ENTRY

(5) CHARGE
BY
CONSIGNEE
FOR
COMMISION
ON SALES,
$20% OF
$850, OR
$170
 Consignor's book

Separate Books No Separate

Books
JULY 20: CASH $655 CASH $655
(6) CONSGMNT OUT$195 FREIGHT 25
REMITTANCE CONSGMNT OUT $850 COMMISION 170
IN SALES $850
SETTLEMENT CONSGMNT OUT $95
OF ACCOUNT CONSGMNT INCOME $95
TOGETHER
WITH
ACCOUNT
SALES
RENDERED BY
CONSIGNEE
ACCOUNTING FOR AN UNCOMPLETED
CONSIGNMENT

• Western ships 10 radio sets to R. Green on

consignment. The sets are to be sold at an
advertised price of $85 each and the cost of
the radio is @ $50. The consignee is to be
allowed a comission of 20%.
• Western paid $60 for transportation cost
and Green paid $25 for freight.
 Consignee's Books

Separate Books No Separate

Books
JUNE 6-JULY CASH $510 CASH $510
20; CONSIGNMENT IN $510 SALES $510
(4) Sales of sets PURCHASE $408
for cash, 6 at WESTERN CO $408
$85, or $850
(charge by
consignor in
sales price, $510,
less 20%
commission,
$102, 0r $408
 Consignee's Books

Separate Books No Separate

Books
JULY 20 CONSIGT IN $102 NO ENTRY
(5) CHARGE COMMISION ON CONS
BY SALES $102
CONSIGNEE
FOR
COMMISSION
ON SALES,
$20% OF $510,
OR $102
 Consignee's Books

Separate Books No Separate

Books
JULY 20: CONSIGMN IN $383 WESTERN CO. $383
(6) CASH $383 CASH $383
REMITTANCE
FOR BALANCE
OWED,
TOGETHER
WITH
ACCOUNT
SALES
RENDERED BY
CONSIGNEE
 Consignor's book

Separate Books No Separate

Books
JULY 20: CASH $383 CASH $383
(6) CONSGMNT OUT$127 FREIGHT 15
REMITTANCE CONSGMNT OUT $510 COMMISION 102
FOR BALANCE MERCH.CONS 10
OWED, CONSGMNT OUT $57 SALES $510
TOGETHER CONSGMNT INCOME $57
WITH MERCH.ON CONS $224
ACCOUNT INCOME SUMMARY $200
SALES FREIGHT OUT 24
RENDERED BY
CONSIGNEE
 UNCOMPLETED CONSIGNMENT
TOTAL 6 SETS 4 SETS
CHARGE
CHARGES BY $500 $300 $200
CONSIGNOR OF
CONSIGNED
MERCHANDISE
-FREIGHT 60 36 24
-CHARGE BY
CONSIGNEE:
-FREIGHT IN 25 15 10
-COMMISSION 102 102
$687 $453 $234
==== ==== ====
 Contoh Soal untuk consignment
yang telah selesai
• Western mengirim 10 radio untuk dijualkan
oleh Green dengan dasar consignment.
Harga jual satuan radio $85 dan harga pokok
sebesar @ $50. Pihak konsinyi berhak atas
20% atas penjualan radio tersebut.
• Western mengeluarkan $60 untuk beban
angkut dan Green mengeluarkan $25 untuk
ongkos angkut penjualan.
 Contoh Soal untuk consignment
yang belum tuntas
• Green hanya berhasil menjualkan 6 radio
milik Western.