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Which of the following statement is not true:
- a)If del-creder’s commission is allowed, bad debt will not be recorded in the books of consignor
- b)If del-creder’s commission is allowed, bad debt will be debited in consignment account
- c)Del-creder’s commission is allowed by consignor to consignee
- d)Del-creder’s commission is generally relevant for credit sales
Correct answer is option 'B'. Can you explain this answer?
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Which of the following statement is not true:a)If del-creders commissi...
Understanding Del-Credere Commission
Del-crederes commission is a fee paid by the consignor to the consignee for assuming the risk of bad debts when selling goods on credit. Let’s analyze the statements to identify which one is not true.
Statement Analysis
- a) If del-creders commission is allowed, bad debt will not be recorded in the books of consignor
- This statement is true. Since the consignee bears the risk of bad debts, the consignor does not need to account for bad debts.
- b) If del-creders commission is allowed, bad debt will be debited in consignment account
- This statement is not true. When del-crederes commission is allowed, the bad debt is not debited to the consignment account because the risk is transferred to the consignee. The consignor does not recognize these losses.
- c) Del-creders commission is allowed by consignor to consignee
- This statement is true. The consignor offers this commission as an incentive for the consignee to sell goods on credit.
- d) Del-creders commission is generally relevant for credit sales
- This statement is true. Del-crederes commission applies when goods are sold on credit, as it pertains to managing the risk of non-payment.
Conclusion
In summary, option 'B' is the correct choice for the statement that is not true. Recognizing bad debts in the consignment account contradicts the nature of del-crederes commission, which is designed to mitigate such risks for the consignor.
Del-crederes commission is a fee paid by the consignor to the consignee for assuming the risk of bad debts when selling goods on credit. Let’s analyze the statements to identify which one is not true.
Statement Analysis
- a) If del-creders commission is allowed, bad debt will not be recorded in the books of consignor
- This statement is true. Since the consignee bears the risk of bad debts, the consignor does not need to account for bad debts.
- b) If del-creders commission is allowed, bad debt will be debited in consignment account
- This statement is not true. When del-crederes commission is allowed, the bad debt is not debited to the consignment account because the risk is transferred to the consignee. The consignor does not recognize these losses.
- c) Del-creders commission is allowed by consignor to consignee
- This statement is true. The consignor offers this commission as an incentive for the consignee to sell goods on credit.
- d) Del-creders commission is generally relevant for credit sales
- This statement is true. Del-crederes commission applies when goods are sold on credit, as it pertains to managing the risk of non-payment.
Conclusion
In summary, option 'B' is the correct choice for the statement that is not true. Recognizing bad debts in the consignment account contradicts the nature of del-crederes commission, which is designed to mitigate such risks for the consignor.
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Which of the following statement is not true:a)If del-creders commission is allowed, bad debt will not be recorded in the books of consignorb)If del-creders commission is allowed, bad debt will be debited in consignment accountc)Del-creders commission is allowed by consignor to consigneed)Del-creders commission is generally relevant for credit salesCorrect answer is option 'B'. Can you explain this answer?
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Which of the following statement is not true:a)If del-creders commission is allowed, bad debt will not be recorded in the books of consignorb)If del-creders commission is allowed, bad debt will be debited in consignment accountc)Del-creders commission is allowed by consignor to consigneed)Del-creders commission is generally relevant for credit salesCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statement is not true:a)If del-creders commission is allowed, bad debt will not be recorded in the books of consignorb)If del-creders commission is allowed, bad debt will be debited in consignment accountc)Del-creders commission is allowed by consignor to consigneed)Del-creders commission is generally relevant for credit salesCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statement is not true:a)If del-creders commission is allowed, bad debt will not be recorded in the books of consignorb)If del-creders commission is allowed, bad debt will be debited in consignment accountc)Del-creders commission is allowed by consignor to consigneed)Del-creders commission is generally relevant for credit salesCorrect answer is option 'B'. Can you explain this answer?.
Which of the following statement is not true:a)If del-creders commission is allowed, bad debt will not be recorded in the books of consignorb)If del-creders commission is allowed, bad debt will be debited in consignment accountc)Del-creders commission is allowed by consignor to consigneed)Del-creders commission is generally relevant for credit salesCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statement is not true:a)If del-creders commission is allowed, bad debt will not be recorded in the books of consignorb)If del-creders commission is allowed, bad debt will be debited in consignment accountc)Del-creders commission is allowed by consignor to consigneed)Del-creders commission is generally relevant for credit salesCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statement is not true:a)If del-creders commission is allowed, bad debt will not be recorded in the books of consignorb)If del-creders commission is allowed, bad debt will be debited in consignment accountc)Del-creders commission is allowed by consignor to consigneed)Del-creders commission is generally relevant for credit salesCorrect answer is option 'B'. Can you explain this answer?.
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