Accountancy · Class 12 Commerce
Ch 3Consignment — Class 12 Accountancy, concept-first.
A business often wants to sell its goods in a distant town, a different state, or even a different country, but does not want to set up its own branch there or find an outright buyer willing to purchase the entire lot in advance.
Key concepts
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Consignment: Meaning, Consignor and Consignee
A consignment is the despatch of goods by their owner (the consignor) to an agent (the consignee) in another place, for the agent to sell on the owner's behalf at the owner's risk, in return for a commission.
Most relevant Q&A
Chapter contents
The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.
Meaning of Consignment, Consignor and Consignee
A business often wants to sell its goods in a distant town, a different state, or even a different country, but does not want to set up its own branch there or find an outright buyer willing to purcha…
Proforma Invoice and Account Sales
Because a consignment is not a sale, the consignor cannot send the consignee an ordinary invoice demanding payment — the consignee has not bought anything.
Expenses on Consignment and Valuation of Unsold Stock
Every consignment involves expenses beyond the cost of the goods themselves — freight, insurance, carriage, loading and unloading charges, octroi or entry-tax, clearing charges, godown rent, advertise…
Normal Loss and Abnormal Loss on Consignment
Goods sent on consignment do not always arrive, or remain, in exactly the quantity despatched. Some shortage is a natural, unavoidable feature of certain goods — a liquid that evaporates a little in t…
Commission on Consignment: Ordinary, Del Credere and Over-Riding
A consignee earns commission for acting on the consignor's behalf, and a consignment agreement can provide for up to three distinct kinds of commission, each rewarding a different aspect of the consig…
Consignment Account and Consignee's Account in the Books of the Consignor
A consignor records every consignment through two accounts working together. The Consignment Account is a NOMINAL account opened separately for each consignment (or each consignee), through which ever…
Exercises
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- Q8Distinguish between Consignment and Sale, stating at least four points of difference.Free
- Q9Explain the Proforma Invoice and the Account Sales, and state how they differ from each other.Preview
- Q10Distinguish between Normal Loss and Abnormal Loss on consignment, and explain how each is treated while valuing the unsold stock.Preview
Sample & Board Papers
Sample papers and previous-year board questions for this subject.
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- Q1Vijaya of Vijayawada consigned goods worth ₹ 20,000 to his agent Bhavani of Bangalore on consignment. Vijaya spent ₹ 1,000 on transport, ₹ 5…Preview
- Q2Del credere commission.Preview
- Q3Dheeraj of Vijayawada consigned goods worth ₹ 40,000 to his agent Charan of Chennai on consignment. Dheeraj spent ₹ 2,000 on transport, ₹ 1,…Preview
- Q4Delcredary Commission.Preview
- Q5What do you mean about consignment ? Explain the difference between consignment and sale.Preview
- Q6What is an Account Sales ?Preview
- Q7Bhaskar of Rajahmundry consign 500 radio sets each at ₹ 600 to Prasad of Tenali on consignment. Bhaskar paid ₹ 12,000 as freight and insuran…Preview
- Q8Delcredere commission.Preview
More questions
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- Q1A consigned 500 radio sets, costing ₹100 each, to B. A paid ₹5,000 as freight and insurance while despatching the goods. B paid ₹2,000 as cl…Free
- Q2A consignor sent 1,000 kg of a chemical, costing ₹18 per kg, to a consignee, and paid ₹1,000 as freight. On the journey, 50 kg of the chemic…Free
- Q3A sent 200 cases of goods to B, costing ₹500 per case, and paid ₹10,000 towards freight and insurance while despatching them. Before B could…Free
- Q4B, acting as C's consignee, sold the entire consignment of goods for ₹80,000, and is entitled to an ordinary commission of 5% on sales, with…Preview
- Q5B sold goods on consignment for C, aggregating ₹1,00,000, of which ₹30,000 was on credit. B is entitled to an ordinary commission of 5% and…Preview
- Q6A consigned goods costing ₹1,00,000 to B, invoicing them at ₹1,20,000 (a 20% loading over cost, to keep B unaware of the actual cost and pro…Preview
- Q7A consigned 1,000 units of goods, costing ₹50 each, to B. A paid ₹5,000 as freight and ₹2,000 as insurance while despatching the goods. B pa…Preview