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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

LO3 Goods held on consignment remain the property of the

  1. (a) consignee.
  2. (b) consignor.
  3. (c) buyer.
  4. (d) seller.

To determine

Determine the person to whom the property of goods is held on consignment.

Explanation

Consignment: Consignment is an agreement made between consignor (the owner of goods) and consignee (one who sells goods on behalf of consignor). The consignor is owner of goods and holds the ownership of goods until they are sold by consignee. So, consignee is an agent who receives the shipment of goods or inventory and sells them.

Accounting treatment:

  • The consignor records the shipment of goods; maintains physical count of inventory at different locations; and reconciles the inventory sent, inventory sold, inventory at hand.
  • The consignee records the sale of goods, reconciles the inventory received, inventory sold, and inventory at hand...

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