BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The consignee may incur expenses like Octroi duties, unloading charges, godown rent, insurance for storage, delivery charges etc., in relation to consignment. These expenses may have been paid in cash or by cheque or might be still unpaid.

Detailed explanation-2: -In the books of the consignor, the expenses incurred by the consignor should be debited to consignment account. These expenses have been incurred by the consignor in direct relation with the consignment. Hence, it is only correct to record them in the consignment account on account of consignment expenses.

Detailed explanation-3: -The goods are sold on owner’s risk and hence, profit/loss goes to owner. Consignee only gets re-imbursement of expenses incurred by him and commission on sale made by him, because sale that proceeds, belongs to owner (consignor).

Detailed explanation-4: -Non-recurring expenses or direct expenses are all such expenses which are incurred by the consignor or consignee to bring these goods from consignor’s place to consignee’s place freight or carriage on purchase, insurance of goods in transit, loading and unloading charges etc.