A consignor who has goods out on consignment with an agent should include the goods in ending inventory even though they are not in the possession of the consignor. True|False?

Question

Maren Graham

Business

10 February, 13:54

A consignor who has goods out on consignment with an agent should include the goods in ending inventory even though they are not in the possession of the consignor. True|False?

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Answers (1)

Know the Answer?

Giovanny Grimes · Answer 1

The correct answer is True.

Explanation:

When a company is commissioned by another company to sell its products while retaining ownership, it is sold on consignment. The shipper transfers the inventory to the business (the consignee), but the consignor retains the legal title. If the recipient cannot sell the products, they are returned to the sender. If you sell them, you remit the sale price to the shipper and take a commission. Products on consignment are included in the consignor's inventory, not those of the consignee, although they are not in the physical possession of the consignor.