Consignee's books Consignor's books
Upon receipt of the delivery
No journal entry Debit: Consignment Inventory In transit
Credit: Merchandise Inventory
Upon receipt of the inventory in consignee's location
No journal entry Debit: Consignment Inventory
The consignee can assign "Consignment Receipt"
account or other account to track "non-owned
inventory" Credit: Consignment Inventory In transit
Upon consignee's sale
Debit: Cash No entry
Credit: Sales
Credit: Output VAT
Upon consignee's billing and Consignor's Sales Invoice
Debit: Cost of Sales Debit: Accounts Receivable-Consignee
Debit: Input tax (if there's any) Credit: Sales
Credit: Accounts Payable-Consignor Credit: Output VAT
Debit: Cost of Sales
Credit: Consignment Inventory
The consignee issues invoice for the commission
Debit: Accounts Receivable-Consignor Debit: Commission Expense
Credit: Commission Income Debit: Input tax
Credit: Output VAT Credit: Accounts Payable-Consignee
The consignee remits to the consignor
Debit: Accounts Payable-Consignor Debit: Cash
Credit: Accounts Receivable-Consignor Debit: Accounts Payable-Consignee
Credit: Cash Credit: Accounts Receivable-Consignee
Upon Return of unsold consigned goods
No journal entry Debit: Merchandise Inventory
The consignee can assign "Consignment Return"
account or other account to track "non-owned
inventory" Debit: Consignment Inventory
Notes:
Consignment Receipt and Consignment Return is not part of company's balance sheet
CWT and EWT is not considered for presentation purposes, may add a switch or option if applicable
