Summary Consignment and Joint Venture

Consignment and joint venture
Introduction
Recording the transactions in the books of account of the consignor
Consignment with ABC (consignee) account
ABC (consignee) account
Goods sent on consignment account
Recording transactions in X's income statement
Extract from the SOFP at the end of month 1
Recording transactions in the books of the consignee
X's account (consignor)
Goods sent to consignee at more than cost
Advantages of such system are:
Disadvantages of such system are:
Joint venture
Situation 1: A separate set of accounting records are kept to record all the transactions of the ventur
Joint venture bank account
Joint venture account
3. Each party a/c (separate a/c)
Situation 2: Each party to the joint venture keeps a record of only the transactions they pay in respec
In books of X
Joint venture account
Memorandum joint venture account (an income statement for the venture)
Situation 3: Each party to the joint venture keeps a record of all the transaction.
In books of X
Joint venture account
Y's account
X's account
Advantages
Disadvantages



Introduction

💡 Consignment: The nature of consignment is for someone say in one country , to act as sel
someone else in another country.




💡 Consignor: The party which transfers goods for sale to the consignee.




💡 Consignee: The party which receives goods for sale.

, ABC (consignee) account




Goods sent on consignment account