Crest Jewelers buys diamonds from Excel Gems to resell with the right to return the unsold stones in lieu of payment. This is
A) a bailment.
B) a consignment.
C) a sale on approval.
D) a sale or return.

Question

Quizplus · Accepted Answer

This transaction is a sale or return, as Crest Jewelers has the option to return the unsold diamonds in lieu of payment. A bailment would involve the temporary transfer of possession without transferring ownership, a consignment would involve Excel Gems retaining ownership until the diamonds are sold, and a sale on approval would involve Crest Jewelers having the option to purchase the diamonds after a trial period.

Crest Jewelers Buys Diamonds from Excel Gems to Resell with the Right