Which of the following is most true regarding consignment arrangements?
A) Revenue is recognized at the point in time when the consignment arrangement is made.
B) Revenue is recognized when goods are transferred to the consignee.
C) Revenue is recognized upon sale by the consignee to an end customer.
D) Revenue is never recognized because GAAP does not allow such arrangements.

Question

Quizplus · Accepted Answer

Consignment arrangements normally do not qualify for revenue recognition until delivery is made to the end customer. Prior to that point, control of goods is viewed as having been retained by the consignor, not by the consignee.

Which of the Following Is Most True Regarding Consignment Arrangements