Consignment is inventory that you have on-hand, but you don't pay for this type of inventory until it is sold. Since the shop doesn't have to pay for the inventory until sold, it is not setup as a payable. Instead, this type of inventory is received as a consignment slip (not a supplier invoice). The accounting entry will be a debit to inventory and a credit to consignment liability–which is liability that is not yet payable to the supplier. After selling this consignment inventory, it will be marked as consignment sold and can then be sold as a supplier invoice to payables.
Watch the video segments below to see how to perform various consignment inventory tasks.
Part 1 - Consignment Inventory
Part 2 - Consignment Inventory
Part 3 - Consignment Inventory
You can review the slide deck that can be seen throughout the webinar videos. For more help on consignment inventory, see the Consignment article.