Consignment Account - Terminologies - SS3 Accounting Lesson Note

A consignment account is used when goods are sent by one person (the consignor) to another person (the consignee) to sell on their behalf. The following are some common terminologies used in a consignment account:

• Consignment: The act of sending goods by one person (the consignor) to another person (the consignee) to sell on their behalf.

• Consignor: The person who sends the goods to the consignee for sale.

• Consignee: The person who receives the goods from the consignor for sale.

• Consignment note: A document that details the goods sent by the consignor to the consignee, including the quantity, description, and value of the goods.

• Consignment inventory: The goods sent by the consignor to the consignee for sale.

• Commission: The amount paid by the consignor to the consignee for selling the goods.

• Sales proceeds: The amount received by the consignee from the sale of the goods.

• Unsold stock: The goods that remain with the consignee after the consignment period has ended.

• Consignment period: The period of time agreed upon between the consignor and the consignee for the sale of the goods.

• Account settlement: The process of reconciling the sales proceeds with the commission owed to the consignee and any expenses incurred during the consignment period.