What is the characteristic of consignment in the Supplier Consignment (2LG) process?

Question

Options

• AA vendor provides you with material that is stored on your premises but is still the property of the
• BA vendor provides you with material with agreed periods and you have the liability of the
• CA vendor stores your material in its premises but has no liability on the consignment stock
• DA vendor provides you with material with agreed periods that is stored in its premises

• A
  89% (48)
• B
  6% (3)
• C
  2% (1)
• D
  4% (2)

Explanation

In Supplier Consignment (2LG), the vendor delivers goods to your premises for storage, but ownership remains with the vendor until you withdraw the material for use - at which point payment is triggered. Option B is wrong because liability for consignment stock stays with the vendor, not you. Option C is wrong because it reverses the location - in consignment, you store the vendor's goods, not the other way around. Option D is wrong because the material is stored on your premises, not the vendor's. Memory tip: Think "CONsignment = CONtrolled by the vendor" - the vendor keeps control (ownership) even though the goods sit in your warehouse.

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