the additional Commission to the consignee Who agrees to bear the loss on account of bad debt is called ?
Answers
Answer:
If consignment debtor does not pay or is unable to pay the debt due and the consignee is unable to collect the due even after making appropriate efforts, the debt becomes bad.
Who bears the loss
The loss on account of bad debts is to be borne by the consignor or the consignee depending on the agreement made between them. Consignee in receipt of delcredere commission is an indicator of such an agreement.
Consignee receiving Del Credere commission
Where the consignee is in receipt of Del credere commission he would be responsible for the collection of the dues from the consignment debtors and thus would have to bear the loss on account of bad debts.
Consignee not receiving Del Credere commission
Where the consignee is not in receipt of Del credere commission he would not be responsible for the non payment of dues by the consignment debtors and thus the consignor would have to bear the loss on account of bad debts.
Not that the consignee would not take any responsibility for the collection of dues, but that he would not bear any loss on account of the consignment debtors not paying up.
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