BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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goods forwarded from one place to another
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goods forwarded by one person to another
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goods despatched by the owner to its agent
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goods despatched by the owner to its agent for the purpose of sale
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Detailed explanation-1: -Consignment is a type of business arrangement in which the owner of the goods sends them to another person (agent) for sale on his behalf. The person (owner) who sends goods is called the “consignor” and another person (agent) who receives the goods is called “consignee”.
Detailed explanation-2: -Definition. The contract or an agreement of sending several goods by the producers or manufacturers of a place to their agents for the sale is known as a consignment. The consignor is the person who sends the goods. Generally, producers or manufacturers are consignors.
Detailed explanation-3: -Goods sent on Consignment Account is a real account. It is closed up by transferring its balances to trading accounting. It shall be shown on credit side of trading account.
Detailed explanation-4: -In the case of consignment, the consignee is the agent and the consignor is the principal. In case of a sale, the ownership of goods is transferred immediately to the purchaser. In consignment, ownership is not transferred to the consignee. He works entirely on behalf of the consignor.