Consignment stock
From Wikipedia, the free encyclopedia
Consignment stock is stock legally owned by one party, but held by another.
Contents |
[edit] Ownership
Ownership of consignment stock is passed only when the stock is used (issued). Unused stock in a warehouse may be returned to the manufacturer.
[edit] Accounting
As ownership of consignment stock is not transferred until use, invoicing is not immediate. To account for a replenishment of consignment stock at a customer site, a manufacturer must credit inventory and debit customer consignment stock. Only after a customer actually uses the consignment stock may an accounts payable be created.
[edit] See also
- Manufacturing
- Distribution
- Logistics, Transportation
- Just in time
- Vendor-managed inventory
- Scan-based trading
