PPT - Consignment Accounting (Part - 2) CA Foundation Notes | EduRev

Fundamentals of Accounting for CA CPT

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CA Foundation : PPT - Consignment Accounting (Part - 2) CA Foundation Notes | EduRev

 Page 1


Consignment Accounting 
CPT Fundamentals of Accounting Chapter 7 Unit I Part 2 
 
CA. Rajesh Singh, ACA  
 
Page 2


Consignment Accounting 
CPT Fundamentals of Accounting Chapter 7 Unit I Part 2 
 
CA. Rajesh Singh, ACA  
 
 
  CREDIT SALES AND  
DEL- CREDERE COMMISSION 
 
• It is an additional commission paid to a consignee who 
guarantees the payment in case of credit sale. By giving 
the Del-Credere commission the consignor transfer the 
risk of bad debts to the consignee. Del-Credere 
commission is calculated on the gross sale proceeds 
unless there is any agreement between them to provide 
it on credit sales only.  
• Note : If del-credere commission is given 
then risk relating to credit sales i.e., bad 
debts get transferred to consignee. 
 
2 
Page 3


Consignment Accounting 
CPT Fundamentals of Accounting Chapter 7 Unit I Part 2 
 
CA. Rajesh Singh, ACA  
 
 
  CREDIT SALES AND  
DEL- CREDERE COMMISSION 
 
• It is an additional commission paid to a consignee who 
guarantees the payment in case of credit sale. By giving 
the Del-Credere commission the consignor transfer the 
risk of bad debts to the consignee. Del-Credere 
commission is calculated on the gross sale proceeds 
unless there is any agreement between them to provide 
it on credit sales only.  
• Note : If del-credere commission is given 
then risk relating to credit sales i.e., bad 
debts get transferred to consignee. 
 
2 
 
 
Accounting Entries for Credit 
Sales where no Del-Credere 
Commission is given 
 
 
 
 
 
 
 
 
 
In the books of the consignor 
  1. For Credit Sales 
 Consignment Debtors Account                      Dr. 
  T o Consignment to ... Account 
3 
Page 4


Consignment Accounting 
CPT Fundamentals of Accounting Chapter 7 Unit I Part 2 
 
CA. Rajesh Singh, ACA  
 
 
  CREDIT SALES AND  
DEL- CREDERE COMMISSION 
 
• It is an additional commission paid to a consignee who 
guarantees the payment in case of credit sale. By giving 
the Del-Credere commission the consignor transfer the 
risk of bad debts to the consignee. Del-Credere 
commission is calculated on the gross sale proceeds 
unless there is any agreement between them to provide 
it on credit sales only.  
• Note : If del-credere commission is given 
then risk relating to credit sales i.e., bad 
debts get transferred to consignee. 
 
2 
 
 
Accounting Entries for Credit 
Sales where no Del-Credere 
Commission is given 
 
 
 
 
 
 
 
 
 
In the books of the consignor 
  1. For Credit Sales 
 Consignment Debtors Account                      Dr. 
  T o Consignment to ... Account 
3 
Journal… 
  2.   For Collections from Debtors 
 Bank or Cash Account  Dr.   (collected by consignor) 
 Consignee Account        Dr. (collected by consignee) 
  T o Consignment Debtors Account 
  
 3.   For Bad Debts / Disc Allowed  
 Bad Debts /Discount Allowed Account               Dr. 
      T o Consignment Debtors Account 
  
 
4 
Page 5


Consignment Accounting 
CPT Fundamentals of Accounting Chapter 7 Unit I Part 2 
 
CA. Rajesh Singh, ACA  
 
 
  CREDIT SALES AND  
DEL- CREDERE COMMISSION 
 
• It is an additional commission paid to a consignee who 
guarantees the payment in case of credit sale. By giving 
the Del-Credere commission the consignor transfer the 
risk of bad debts to the consignee. Del-Credere 
commission is calculated on the gross sale proceeds 
unless there is any agreement between them to provide 
it on credit sales only.  
• Note : If del-credere commission is given 
then risk relating to credit sales i.e., bad 
debts get transferred to consignee. 
 
2 
 
 
Accounting Entries for Credit 
Sales where no Del-Credere 
Commission is given 
 
 
 
 
 
 
 
 
 
In the books of the consignor 
  1. For Credit Sales 
 Consignment Debtors Account                      Dr. 
  T o Consignment to ... Account 
3 
Journal… 
  2.   For Collections from Debtors 
 Bank or Cash Account  Dr.   (collected by consignor) 
 Consignee Account        Dr. (collected by consignee) 
  T o Consignment Debtors Account 
  
 3.   For Bad Debts / Disc Allowed  
 Bad Debts /Discount Allowed Account               Dr. 
      T o Consignment Debtors Account 
  
 
4 
Journal… 
4.   For Closing Bad Debts / Discount Allowed Account 
  Consignment to... Account                                Dr. 
   To Bad Debts /Discount Allowed Account 
 
5 
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