Q.Y, a consignee, is allowed an ordinary commission of 5% plus a del credere commission of 2% on total sales. During the year he sold, entirely on credit, goods worth Rs 40,000 on behalf of the consignor, but one customer who had purchased goods worth Rs 3,000 subsequently failed to pay.

Del credere commission is an additional commission paid to the consignee for taking on the risk of non-payment by customers. Once it is allowed, any bad debts are borne by the consignee, not the consignor.

Normally the consignor bears the loss of bad debts on consignment sales. To shift this risk, the consignor may allow an extra commission called del credere commission. In return, the consignee guarantees payment for all sales (including credit sales) and must stand the loss if a customer fails to pay. It …

Del credere commission is an additional commission given to the consignee for taking responsibility for bad debts; once allowed, the consignee - not the consignor - bears the loss if customers fail to pay.

To protect himself from losses on credit sales, the consignor allows the consignee this special commission, generally calculated on total sales. By accepting it, the consignee guarantees collection of the amounts due, so the consignor is assured of full sa …

Del credere commission is an extra commission the consignor gives the consignee for taking the risk of bad debts; once allowed, any loss from customers who fail to pay is borne by the consignee, not the consignor.

Normally the consignor bears bad debts on credit sales. To avoid this risk, the consignor allows the consignee a special additional commission, called del credere commission, usually calculated on total sales. In return the consignee guarantees payment, so the consignor receives th …

Del credere commission is an additional commission paid to the consignee for taking on the risk of non-payment by customers. Once it is allowed, any bad debts are borne by the consignee, not the consignor.

Normally the consignor bears the loss of bad debts on consignment sales. To shift this risk, the consignor may allow an extra commission called del credere commission. In return, the consignee guarantees payment for all sales (including credit sales) and must stand the loss if a customer fails to pay. It …

Del credere commission is an extra commission allowed by the consignor to the consignee for bearing the risk of bad debts on credit sales; once paid it, the consignee guarantees collection of all amounts due.

In the Consignment chapter of TS Intermediate 2nd-year Accountancy, the consignee normally bears no loss from customers who fail to pay. When the consignor wants protection against such bad debts, it allows a special del credere commission (usually a percentage on total sales, cash and credit). In return the consignee guarantees recovery of the sale proceeds and person …

Del credere commission is an extra commission given to the consignee for guaranteeing payment on credit sales; the consignee then bears any bad-debt loss.

In consignment, the consignee normally earns ordinary commission on the total sales. When goods are sold on credit, there is a risk that some customers may not pay. To cover this risk, the consignor may allow the consignee an extra commission called del credere commission. In return, the consignee guarantees the realisation of all credit sales and personally bears any loss due to bad debts. It is usually calculated on total sales (unless stated otherwise). Because the consignee now carries the bad-debt …

Del credere commission is extra commission paid to the consignee for guaranteeing recovery of credit sales, so the consignee bears bad-debt losses.

This is a TS Intermediate 2nd-year Accountancy consignment short question.

Meaning: When goods are sold on credit by the consignee, there is a risk that some customers will not pay. To protect the consignor from this risk, the consignor may allow the consignee an extra commission over and above the ordinary commission, called del credere commission. In return, the consignee guarantees the realisation of all credit sales and personally bears any loss arising from bad debts. It is u …

Del credere commission is an extra commission the consignor pays the consignee in return for the consignee guaranteeing the collection of credit sales, so the consignee bears any bad-debt loss.

Explanation

Normally the consignee only sells goods as an agent and is not responsible if a credit customer does not pay — that loss falls on the consignor. To make the consignee bear this risk, the consignor allows an additional commission called del credere commission. It is usually calculated on total sales (both cash and credit, unless stated otherwise). Once del credere commission is given, any bad debts are borne by the consignee, and in the consig …