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Difference Between Consignment and Sales:

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Learning objectives of this article:
  • What is difference between consignment and sales?

Following are the points of difference between consignment and sales:

1.

Ownership:

Consignment:
Ownership is not transferred to the consignee, it remains with the consignor.

Sales:
Ownership passes to the buyer.

   
2.

Relationship:

Consignment:
Relationship between consignor and consignee is that of principal and agent.

Sales:
Buyer is the debtor of seller until his account is settled.

   
3.

Risk of Damages:

Consignment:
Consignee holds the goods at the risk of the consignor, so any damage to the goods is a loss to the consignor.

Sales:
Any damage to the goods is the loss of the buyer.

   
4.

Return of Goods:

Consignment:
The consignee may return the goods to the consignor if not sold.

Sales:
Goods once sold are generally not returned.

   
5.

Expenses After Delivery:

Consignment:
Expenses after deliver are born by the consignor.

Sales:
Expenses after deliver are born by the buyer

   
6.

Forwarding Document:

Consignment:
Forwarding document is proforma-invoice.

Sales:
Forwarding document is invoice.

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Account Sales
Difference between consignment and sales
Journal entries in the books of consignor
Valuation of closing/unsold stock in consignment business
Invoicing goods at a price higher than cost price




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