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account postings for consignment

Dear experts,

Please explain me the account postings for consignment.

thanks in advance,

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3 Answers

  • author's profile photo Former Member
    Former Member
    Posted on Sep 19, 2007 at 05:44 AM

    Hi,

    Consignment

    You manage material A from your vendor as consignment stock at a consignment price of $10/piece.

    Goods Withdrawal

    When you withdraw 100 pieces for consumption, the system makes a posting to the consumption account based on the consignment price. The offsetting entry is made to the account Liabilities from consignment stock.

    Consignment and Pipeline Settlement

    When the consignment withdrawals are settled, the liability created at the time of the withdrawal is cleared. The offsetting entry is posted to the vendor account.

    The system determines which taxes are to be posted for each item from the consignment info record or pipeline info record.

    When the system makes postings to the liabilities account, be they for withdrawals or for settlements, it creates the allocation number automatically from the material document number, so that the open items in Financial Accounting can be cleared.

    Regards

    Diwakar

    Reward if useful

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  • author's profile photo Former Member
    Former Member
    Posted on Sep 19, 2007 at 06:15 AM
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  • Posted on Sep 19, 2007 at 10:49 AM

    Hi,

    Consignment stock is a stock that the supplier has placed in the warehouse without charge. It remains the property of the supplier until it is actually used or consumed and should not be included in the value of the stock. The account entries are as follow;

    Goods Issues:

    Consumption A/C: DR,

    Consignment(Liability Account ) Payable: CR,

    Consignment Settlement:

    Consignment (Liability Account )Payable: DR,

    Vendor Account A/C: CR

    If helpful then reward.

    Regards,

    Biju K

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