Financial Accounting Notes

Consignment Account


  1. Definition 
  2. Accounting Entries     
  3. Practical illustration


Consignment of good means the sending of goods by a supplier to his agent to receive, store and sell them on behalf of the supplier after which the proceeds, having deducted all expenses incurred, will be remitted to supplier. The sender of the goods is called consignor while the agent to whom the goods are sent is called consignee.


In the  Books of the consignor you will open 

(a)     Consignment account

i.        Debits all expenses relating to goods consigned

ii.       Credits all revenue relating to goods consigned

(b) Goods sent on consignment account

i.        Debit trading a/c with the value of goods consigned

ii.       Credit consignment account

(c)     Bank account (Extracts)

i.        Debit proceed from consignee (agent) after deducting all expenses incurred.

ii.       Credit all expenses incurred by the consignor.

(d)     Consignee account i. Debit sales account

ii.       Credit all expenses incurred in respect of sales


1.       Define the term consignment of goods

2.       Explain a. Consignor b. Consignee

to Fadeke. Required to prepare.

a.       The account sales sent by Bimbo

b.       The necessary ledger accounts in the books of consignor (Fadeke)


  1. What are books of prime entry
  2. List any seven books of prime entry
  3. Explain the following concepts (a) business entity (b) going – concern
  4. What is a ledger
  5. List and explain three classification of ledger accounts

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