CMA Foundation · Fundamentals of Financial and Cost Accounting · Consignment
In a consignment arrangement, who continues to own the goods while they are lying with the consignee?
The consignor remains the owner of consigned goods until the consignee sells them to a third party. The consignee only holds possession as an agent, so title does not pass to him on dispatch, and unsold goods stay the consignor's property.
- AThe consignee, because he has physical possession
- BThe consignor, until the goods are sold to a third partyCorrect
- CThe customer who has placed a tentative order
- DThe carrier who transports the goods
Explanation
In consignment the consignor only hands over possession; ownership (title) stays with the consignor until the consignee sells the goods to a buyer. The consignee is merely an agent, so possession alone does not make him the owner. Hence the option naming the consignee is wrong.
Did you get it right without looking?
One question tells you little. A timed set on Consignment shows your real accuracy, how long you take and where you lose marks.
More Consignment questions
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