Consignment stock refers to a business arrangement in which the owner of goods (consignor) sends the goods to another party (consignee) for the purpose of selling them. The consignee does not own the goods until they are sold to the customer. The consignee receives a commission on the sale of the goods and returns the unsold goods to the consignor.

Explanation:

Ownership: In consignment stock, the ownership of the goods remains with the consignor until they are sold to the customer.

Purpose: The purpose of consignment stock is to enable the consignor to sell their goods in a new market or through a new channel without taking the risk of investing in a new business or location.

Risk: The risk of loss, damage, or theft of the goods during transportation and storage lies with the consignor.

Payment: The consignee receives a commission on the sale of the goods, which is agreed upon by both parties in advance.

Returns: The unsold goods are returned to the consignor, who may either sell them elsewhere or take them back into their inventory.

Accounting: In accounting, consignment stock is recorded as an asset for the consignor and as a liability for the consignee until the goods are sold to the customer.

Conclusion:

Consignment stock is a business arrangement that allows the consignor to sell their goods in a new market or through a new channel without taking the risk of investing in a new business or location. It is a mutually beneficial arrangement for both the consignor and the consignee, and it requires careful planning and management to ensure success.