Q.Delcredary Commission.

Del credere commission is an extra commission given to the consignee for guaranteeing the recovery of debts arising from credit sales. In return, the consignee stands the loss of any bad debts, and the consignor need not record bad debts in the Consignment Account.

This is a standard AP Inter 2nd-year (Commerce) consignment question, aligned with the NCERT/CBSE commerce curriculum.

Normally the consignee only sells goods and is not responsible if a customer fails to pay. To encourage the consignee to make credit sales and to protect himself, the consignor may allow an additional commission called del credere commission. In exchange for it, the consignee undertakes to bear the loss of any bad debts.

…

Del credere commission is an additional commission the consignor gives the consignee for taking on the risk of non-payment by customers on credit sales. In exchange, the consignee guarantees collection, so bad debts become the consignee's loss, not the consignor's.

This short concept is from the consignment chapter of the AP Inter 2nd-year (Class 12) Accountancy syllabus, which aligns with the NCERT/CBSE commerce curriculum.

…

Del credere commission is an additional commission given to the consignee for bearing the risk of bad debts on credit sales, in return for guaranteeing realisation of the sale proceeds.

In a consignment, apart from ordinary and over-riding commission, the consignor may allow the consignee an extra commission called del credere commission. In return, the consignee undertakes to bear any loss arising from bad debts on credit sales — that is, the consignee guarantees the collection of the money.

…