Q.A ________ is a mercantile agent to whom goods are entrusted for sale by a principal and takes physical possession of the goods but does not obtain ownership.

The correct answer is (b) Factor. A factor is a mercantile agent who takes physical possession of the principal's goods and sells them, without becoming their owner.

In the Tamil Nadu HSC Commerce syllabus, various mercantile agents (middlemen) are distinguished by whether they hold possession and whether they own the goods:

• Factor — is entrusted with the possession of goods by the principal and sells them in his own name, but ownership remains with the principal. This exactly matches the question, so (b) is correct.
• Broker — only brings the buyer and seller together to negotiate a deal; he does not take possession of the goods.
• Warehouse keeper — stores goods for a charge; he is not appointed to sell them. …