CMA Intermediate · Financial Accounting · Consignment

In consignment accounts, the main difference between an ordinary commission and a del credere commission paid to a consignee is that the del credere commission:

Del credere commission is an additional commission paid to the consignee for guaranteeing the collection of credit sales. The consignee bears bad debts, so the consignor does not charge them to the consignment account. It is unrelated to storage, selling above invoice price, or unsold stock.

1. Ais paid for storing the goods in the consignee's godown
2. Bis paid additionally for the consignee bearing the risk of bad debts on credit salesCorrect
3. Cis paid only when the consignee sells goods at a price above the invoice price
4. Dis paid on the unsold stock lying with the consignee