Multiple choice

If del-credere commission is allowed for bad debt, consignee will debit the bad debt amount to

  1. commission earned account

  2. consignor account

  3. debtors account

  4. general trading account
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A Correct answer
Explanation

Del-credere commission is an additional commission paid to the consignee for guaranteeing the collection of debts from customers. When bad debts occur despite this guarantee, the consignee bears the loss and must debit the Commission Earned account to reduce the commission receivable. The consignor account is not affected as the consignee has assumed the credit risk.

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