BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -There are no entries passed in the books of the consignee for the consignment of goods sent by the consignee and also for any expenses incurred by the consignor. However, the advance paid to the consignor, sales made, expenses incurred on the consignment and commission earned needs to be recorded.

Detailed explanation-2: -Accounting treatment in the Books of Consignor So entire profit or loss belongs to the consignor and consignee receives the commission as his remuneration. On the consignment of the goods, the consignor also sends a Performa invoice. When the consignee remits money, he sends Account sale to the consignor.

Detailed explanation-3: -Consignment account is a Nominal account.

Detailed explanation-4: -The consignor sends goods on consignment to the consignee to sell them on his behalf. For this, he allows a certain amount as commission to the consignee. So, the consignee earns commission and opens a commission earned account in his books of accounts.