This is a statement supplied by an agent or a consignee who sells goods on behalf of the consignor. It is a report or statement that shows the price at which the goods are sold, expenses incurred by the consignee on behalf of the consignor, consignee’s commission and the net balance for which the consignee is liable. It shows particulars of goods sold, the gross proceeds realized, the expenses incurred by the consignee including his commission and the net proceeds. It is a statement of affairs, relating to the consignment, prepared periodically by the consignee, and sent to the consignor. It shows the merchandise received, merchandise sold, expenses chargeable to the consignment and the cash remitted to the consignor.
The details in the account sales form a basis for the consignor, to account for the transactions that take place at the consignee’s end. It has a heading indicating the period relevant to the data in the statement. This includes both cash and credit sales. They are sales are used to track product purchases that the customer intends to pay off at a later date. The account total is then paired with the sales returns and allowances account to derive the net sales figure that is listed in the income statement.