When goods are shipped on consignment
A)revenue should be recognized by the manufacturer or seller on delivery.
B)revenue should not be recognized by the manufacturer or seller on delivery.
C)the risk of ownership of the goods is passed on to the distributors.
D)they are always counted in the customer's inventory.

Question

Quizplus · Accepted Answer

When goods are shipped on consignment, the seller (consignor) retains legal ownership of the goods until they are sold by the consignee. Therefore, revenue should not be recognized by the consignor on delivery since ownership has not been transferred. Instead, revenue should be recognized by the consignor only when the goods are sold by the consignee.

When Goods Are Shipped on Consignment