Meaning and definition of Consignment

Consignment:-
Quite often it happens that a manufacturer or a wholesale dealer who does not find ready
market in his own place becomes desirous of seeking a good market elsewhere. Even when there is a good market for his goods in his own place, he is often anxious to make his goods popular elsewhere. For this purpose the merchant employs a leading dealer at the place where he wants to push his goods to act as his agent and sell goods on his behalf and risk as agent on commission.
Goods so sent to a person are known as Consignment.
 The person who sends such goods is
known as the Consignor and the person to whom the goods are sent is known as the consignee.

Such goods sent to the Consignee remain the property of the Consignor. The Consignee to whom the goods are sent does not buy them, but, merely undertakes to sell them on behalf of the
consignor. He is not responsible for any loss or damage to the goods, if such loss or damage is
caused for no fault of the Consignee.
Such a shipment of the goods by the Consignor cannot be treated as ordinary sale and such
transactions require special treatment in the books of accounts.