Question

Alex Guerin is an artist who sells his work under consignment (he displays his work in local barbershops, and customers purchase his work there). Guerin recently transferred a painting on consignment to a local barbershop. After Guerin has transferred a painting to a barbershop, the painting: A. Should be counted in the barbershop’s inventory, as the barbershop now possesses it. B. Should be counted in Guerin’s inventory until the barbershop sells it. C. We lack sufficient information to know who should carry the painting in inventory. D. Should be counted in either Guerin’s or the barbershop’s inventory, depending on which incurred the cost of preparing the painting for display

Answer 1

Answer:

B. Should be counted in Guerin’s inventory until the barbershop sells it.

Explanation:

In this case Alex is the consignor and barbershop is the consignee. Consignee is just an agent of consignor. The ownership of inventory with the consignee is stillwith the consignor until sold.