Final answer:
Revenue from consignment sales is only recognized when the consigned items are actually sold by the consignee, not merely when they are placed on consignment, regardless of the probability of future sales.
Step-by-step explanation:
The statement that revenue from a consignment sale is recognized when the item is placed on consignment with the middleman, if sales are probable, based on past experience, is false. In accordance with the revenue recognition principle, revenue from the sale of goods on consignment should be recognized only when the goods are actually sold by the consignee (middleman) to the end customer. The consignment inventory remains the property of the consignor until the sale occurs. Therefore, simply placing the goods on consignment does not fulfill the criteria for revenue recognition, even if past experience suggests that the sale is probable.