Why Is Consignment Not A Sale?

1.	Why Is Consignment Not A Sale?
Answer» Following are the reasons that explain why CONSIGNMENT is not a sale:− Ownership: Ownership of GOODS need to be transferred from seller to buyer in case of sale, but ownership of goods remains with the consignor, till the goods are sold by the consignee. Risk: In case of a consignment, normally, risk remains with the consignor in the event of goods being lost or destroyed. Relationship: The RELATION between a seller and a buyer will be of debtor and creditor in case where goods are sold on credit basis. On the other hand, the relationship between a consignor and a consignee is that of PRINCIPAL and agent. Goods Return: Usually, the sold goods cannot be returned back; however, if there is any manufacturing defect or any other technical FAULT, seller is obliged to take them back. On the other hand, consignee may return the unsold stock of goods to consignor anytime. Following are the reasons that explain why consignment is not a sale:−

Answer»

Following are the reasons that explain why CONSIGNMENT is not a sale:−

Ownership: Ownership of GOODS need to be transferred from seller to buyer in case of sale, but ownership of goods remains with the consignor, till the goods are sold by the consignee.
Risk: In case of a consignment, normally, risk remains with the consignor in the event of goods being lost or destroyed.
Relationship: The RELATION between a seller and a buyer will be of debtor and creditor in case where goods are sold on credit basis. On the other hand, the relationship between a consignor and a consignee is that of PRINCIPAL and agent.
Goods Return: Usually, the sold goods cannot be returned back; however, if there is any manufacturing defect or any other technical FAULT, seller is obliged to take them back. On the other hand, consignee may return the unsold stock of goods to consignor anytime.

Following are the reasons that explain why consignment is not a sale:−

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