The entry that the consignee makes to record the commission earned on a sale of goods held on consignment is
A)$\begin{array} { l }
\text { Cash } &XX\
\text { Consignment-in }&&XX
\end{array}$
B)$\begin{array} { l }
\text { Consignment-in }&XX \
\text { Commissions Earned }&&XX
\end{array}$
C)$\begin{array} { l l }
\text { Cash } & \mathrm { XX } \
\text { Commissions Earned } & &\mathrm { XX }
\end{array}$
D)$\begin{array} { l l }
\text { Consignment-in } & \mathrm { XX } \
\text { Cash } & \mathrm { XX }
\end{array}$

Question

The entry that the consignee makes to record the commission earned on a sale of goods held on consignment is
A)$\begin{array} { l } 
\text { Cash } &XX\
\text { Consignment-in }&&XX
\end{array}$
B)$\begin{array} { l } 
\text { Consignment-in }&XX \
\text { Commissions Earned }&&XX
\end{array}$
C)$\begin{array} { l l } 
\text { Cash } & \mathrm { XX } \
\text { Commissions Earned } & &\mathrm { XX }
\end{array}$
D)$\begin{array} { l l } 
\text { Consignment-in } & \mathrm { XX } \
\text { Cash } & \mathrm { XX }
\end{array}$

Quizplus · Accepted Answer

The commission earned on a sale of goods held on consignment should be recorded as a credit to Consignment-in account and a debit to Commissions Earned account. This is because the consignee is essentially earning a commission on the sale of goods belonging to the consignor. There is no cash transaction involved unless payment is received from the buyer, in which case a separate entry would be needed to record the receipt of cash. Option B correctly reflects this accounting treatment.

The Entry That the Consignee Makes to Record the Commission Cash XX Consignment-in XX\begin{array} { l } \text { Cash } &XX\\\text { Consignment-in }&&XX\end{array} Cash Consignment-in ​XX​XX​

The Entry That the Consignee Makes to Record the Commission $\begin{array} { l } \text { Cash } &XX\\\text { Consignment-in }&&XX\end{array}$