In a consignment relationship, would the consignor record commission expense in cost of goods sold or in operating expenses?
Commission expense is a selling expense for the consignor, so it would typically be recorded in operating expenses and not cost of goods sold. The commission expense would be recorded when the consignee sells the product to a 3rd party and the consignor recognizes the revenue.
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You might also be interested in... What journal entry is recorded by the consignor when goods are shipped to a consignee?
When a consignor sends goods to a consignee, ownership is not transferred. The consignor would record an entry to change the classification of inventory from on hand (in their warehouse) to inventory on consignment. The accounting records should clearly reflect the value of any inventory that is on consignment as inventory on consignment needs to...
What journal entry is recorded by the consignor when the consignee sells the good or service?
You need to understand that when the product is initially transferred from the consignor to the consignee, there is no sale, and the consignor would not record any impact to the income statement. The consignor only records the sale when the consignee sells the goods to a 3rd party. When the inventory is sold, the...
When does a consignor recognize revenue in a consignment relationship?
A consignor does not recognize revenue when the goods are transferred to a consignee. Rather, the consignor would only recognize revenue when the goods are sold by the consignee to a 3rd party (i.e. customer). When the consignee sells the goods to a 3rd party, that is the point at which the consignee can record...
What journal entry is recorded by the consignor when goods are shipped to a consignee?
When a consignor sends goods to a consignee, ownership is not transferred. The consignor would record an entry to change the classification of inventory from on hand (in their warehouse) to inventory on consignment. The accounting records should clearly reflect the value of any inventory that is on consignment as inventory on consignment needs to...
What journal entry is recorded by the consignor when the consignee sells the good or service?
You need to understand that when the product is initially transferred from the consignor to the consignee, there is no sale, and the consignor would not record any impact to the income statement. The consignor only records the sale when the consignee sells the goods to a 3rd party. When the inventory is sold, the...
When does a consignor recognize revenue in a consignment relationship?
A consignor does not recognize revenue when the goods are transferred to a consignee. Rather, the consignor would only recognize revenue when the goods are sold by the consignee to a 3rd party (i.e. customer). When the consignee sells the goods to a 3rd party, that is the point at which the consignee can record...
