Consignment refers to which arrangement?

• A. To give merchandise to an agent to be cared for or sold; the funeral director has merchandise to display but does not pay until it is sold.
• B. To purchase wholesale.
• C. To insure caskets.
• D. To store at funeral home.

Answer: (A)

Consignment is when a supplier places merchandise with a funeral home to be cared for and offered for sale, but ownership remains with the supplier until an item is sold. The funeral home can display and try to sell the goods, but payment to the supplier occurs only after a sale. This setup helps the funeral home offer a wider range of merchandise without tying up cash in inventory, while the supplier bears the risk of unsold stock. If items don’t sell, they can often be returned or credited according to the agreement.

Purchasing wholesale would mean the funeral home buys and owns the merchandise upfront. Insuring caskets is a separate service, not an arrangement for selling goods. Storing at the funeral home is just storage, not an agreement to sell on consignment.