Under a(n) ____ arrangement, the exporter ships the goods to the importer while still retaining actual title to the merchandise.

Question

Quizplus · Accepted Answer

A consignment arrangement is when an exporter sends goods to an importer but retains the ownership (title) of the goods until they are sold to a third party. The importer only pays the exporter for the goods after they are sold. This arrangement has some risks for the exporter since they do not receive payment until the goods are sold, but it also allows for the importer to sell the goods before having to pay for them, which can be beneficial for their cash flow. The other options, a draft, prepayment, and open account, all involve the importer taking ownership of the goods once they are shipped and either paying for them upfront (prepayment), after delivery (open account), or at a specified time in the future (draft).

Under A(n) ____ Arrangement, the Exporter Ships the Goods to the Importer