CONSIGNMENT

DEFINE CONSIGNMENT.
Consignment is an act of sending goods by owner to his agent from one place to another for the
purpose of sale.
ENLIST THE PARTIES INVOLVED IN CONSIGNMENT.
There are two parties involve in consignment:
Consignor
Consignee
DEFINE CONSIGNOR.
The owner who sends his goods for sale purpose to his agent is known as consignor.
DEFINE CONSIGNEE.
The person to whom the goods are sending for sale purpose is known as consignee.
DEFINE CONSIGNMENT OUTWARD.
When the goods are dispatched by the consignor to the consignee, it will be a consignment
outward from consignor point of view.
DEFINE CONSIGNMENT INWARD.
When the goods are dispatched by the consignor to the consignee, it will be a consignment
inward from consignee point of view.
DEFINE ACCOUNT SALE.
It is a periodic statement delivered by consignee to consignor about the goods sold; price realized
his commission and the expenses incurred in connection with the sale.
DEFINE PERFORMA INVOICE.
It is a statement sends by consignor to consignee showing quantity quality and price of goods
delivered.
DEFINE COMMISSION.
The remuneration denoted to consignee for selling the goods of the consignor is called
commission.
DEFINE DELCREDRE COMMISSION.
The extra commission which is paid to consignee if loss on account of bad debts is born by him
DEFINE OVERRIDING COMMISSION.
A commission paid to the consignee by consignor for pushing a new product in the market is
called overriding commission.
DEFINE CONSIGNMENT ACCOUNT.
It is a nominal account which is prepared to calculate profit or loss on consignment

PUNJAB COLLEGE OF COMMERCE

PROF. HAFIZ MUHAMMAD NAWAZ

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CONSIGNMENT

DEFINE NORMAL LOSS.

The loss arises due to natural causes such as evaporation, shrinkage, leakage, evaporation etc, is
called normal loss
DEFINE ABNORMAL LOSS.
The loss arises accidentally such as loss by fire loss by theft etc. is called abnormal loss.
DEFINE NON-RECURRING EXPENSES (DIRECT EXPENSES).
It include expenses incurred to bring the goods to godown of the consignee such as Cartage,
Carriage, Railway charges etc
DEFINE RECURRING EXPENSES (INDIRECT EXPENSES).
It include expenses incurred on selling the goods e.g. Commission, Selling expenses etc
FORMULA TO CALULATE UN-SOLD STOCK
Cost of un-sold unit
Add: Consignor all expenses (Prop)
Add: Consignee direct expenses (Prop)
Un-sold Stock

PUNJAB COLLEGE OF COMMERCE

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PROF. HAFIZ MUHAMMAD NAWAZ

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