Goods sent to an agent on consignment remain part of the inventory of which party until they are sold to a customer?
Correct answer: B. The consignor sending the goods
- A. The consignee receiving the goods
- B. The consignor sending the goods
- C. The transport company carrying the goods
- D. The customer expected to buy the goods
Explanation
The consignor retains ownership of goods sent on consignment until the consignee sells them. Therefore, unsold consignment goods remain in the consignor's inventory, not the consignee's inventory.
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About Inventory Valuation
Inventory valuation determines the cost of unsold goods and its effect on cost of sales and profit. The work covers inventory counts, included costs, FIFO and weighted-average costing, and the rule that inventory is reported at the lower of cost and net realisable value, not simply at its expected selling price.
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