Consignment items

[Amanda@Delta]

We have several products on consignment. Does anyone know the correct way to enter consignment items in. They are not actually in inventory however, they will eventually be payables. I made an entry in purchases/receive inventory with the AP account being Payables On Consignment. It seems to be right, but probably not the correct way it should be entered. Can anyone help?

[MzDallas]

If you are referring to which A/P account to use, and the dollars to record, you might need to check with your accountant on this one.

Since the item is "under your control", your company might be considered liable for the entire amount (retail has a problem with shoplifting, of course) until the item is actually sold.

Whether the item is actually capable of being shoplifted (such as a couch) would probably not come into play, as damage - or a zillion other things - could occur, and your company would still be liable, and for the entire amount.

As to which you need to record for IRS purposes, only your CPA knows. I'm just a bookkeeper, and you couldn't pay me enough to try to keep up with the IRS' daily shenanigans.

Good luck.