In short
In a consignment, the owner of goods (the consignor) ships them to another party (the consignee) to sell on its behalf. The goods stay in the consignor's inventory until they are sold to an end customer.
Key takeaways
- The consignor recognizes revenue when the consignee sells the goods.
- The consignee records only its commission, not the goods or the full sale.
- Physical counts must exclude goods held on consignment for others.
Where it's tested
FAR: Inventory — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Goods held on consignment by a consignee should be included in whose inventory?