Learning objectives of this article:
- Define and explain account sales.
- How is it prepared?
Definition and Explanation:
In consignment sales, the goods are sent
to an agent in another location in the same
country or abroad for the purpose of selling
them at a profit. After selling whole or a
part of the goods, the consignee sends an
account sales to the consignor.
Account sales is a report or
statement that shows the price at which the
goods are sold, expenses incurred by the
consignee on behalf of the consignor,
consignee's commission and the net balance
for which the consignee is liable.
Specimen/Format/Example of Account
Sales:
Account Sales
Consignment of 500 washing
machines sold on behalf of X & Co. by Y &
Co.
|
$ |
$ |
Sold
(500 Machines at the
rate of $200 per
machine: 500
× 200) |
|
100,000 |
Less Expenses and
Commission: |
|
|
Duty and taxes |
2,000 |
|
Godown rent |
1,000 |
|
Insurance of godown |
5,00 |
|
Commission 5% of sales |
5,000 |
8,500 |
|
|
|
|
|
91,500 |
Less
advance |
|
20,000 |
|
|
|
Balance
due and bank draft
enclosed |
|
71,500 |
|
|
|
|
|
|
Signature: |
|
|
Y &
Co. |
|
|
|
Note:
Sometimes consignee
remits and amount to the consignor as
advance. This amount is deducted by the
consignee from the sales proceeds of the
goods.
The consignor gets
necessary information regarding the
gross sales proceeds, expenses paid by
the consignee and the commission of the
consignee from this statement i.e.,
account sales. Consignor then records
this information in his books of
accounts.
|