Introduction to Consignment Accounting: Types of Commission in Consignment

The video tutorial covers the concept of consignment and the different types of commissions involved: ordinary, del credere, and overriding commissions. It explains how each type of commission is calculated and the conditions under which they are applied. The tutorial also includes an example problem to demonstrate the calculation of these commissions in a practical scenario.

Who are the two main parties involved in a consignment agreement?

• Manufacturer and Distributor

• Agent and Principal

• Consigner and Consignee

• Buyer and Seller

What is the ordinary commission based on?

• Net sales

• Net profit

• Total expenses

• Gross sales

Which type of commission is always present in consignment agreements?

• Ordinary Commission

• Del Credere Commission

• Special Commission

• Overriding Commission

What additional responsibility does the Del Credere Commission cover?

• Transporting goods

• Collecting payments from debtors

• Storing goods

• Marketing the product

If a debtor fails to pay, who bears the loss if Del Credere Commission is given?

• Neither

• Consigner

• Consignee

• Both Consigner and Consignee

What is the purpose of Overriding Commission?

• To reduce production costs

• To reward extra sales efforts

• To cover transportation costs

• To manage inventory

How can Overriding Commission be calculated?

• On total expenses

• On net profit

• On the difference between actual and specified sales price

• On total sales only

In the example problem, what is the total number of shirts sold?

• 2000

• 3000

• 1500

• 2500

What percentage of commission is given on the surplus price in the example?

• 15%

• 10%

• 20%

• 5%

In the example, what is the specified selling price per shirt?

• ₹375

• ₹350

• ₹400

• ₹325