Question

Practice Question 02 Cecil gives goods on consignment to Jerry who agrees to try to sell them for a 20% commission. At the end of the accounting period, which of the following parties includes the consigned goods in its inventory? Cecil Jerry Both Cecil and Jerry Neither Cecil nor Jerry

Answer 1

A. Cecil.

Step-by-step explanation:

Cecil gives goods on consignment to Jerry who agrees to try to sell them for a 20% commission. Consignment occurs when goods are sent by their owner (the consignor) to an agent (the consignee), who undertakes to sell the goods.

The consignor, Cecil continues to own the goods until they are sold, so the goods appear as inventory in the accounting records of the consignor, not the consignee, Jerry.