Understanding Commission on Consignment: Types and Calculation

The video tutorial covers the basics of consignment accounting, focusing on three types of commissions: ordinary, del credere, and overriding. Ordinary commission is calculated on total sales, del credere commission involves risk management for credit sales, and overriding commission rewards extra efforts. An example problem demonstrates how to calculate these commissions.

What is the significance of specifying the percentage for ordinary commission in a consignment agreement?

In what scenarios would a consignee bear the loss of bad debts?

What factors determine whether the overriding commission is calculated on total sales or on the difference between actual sales and specified prices?

How do you calculate the total commission payable to a consignee based on the example provided?