Write short note on Del credere commission.

By -

 #ignou BCA second semester subject ECO 02 previous year question with answer

Question.Write short note on Del credere commission.

👉👉👉 Join Telegram group

👉👉👉 Subscribe YouTube channel


Del credere commission is a form of commission paid to an agent or intermediary in a business transaction to assume additional credit risk on behalf of the principal. It is an important concept in commerce and finance. Here are some important points to note about del credere commission for an exam paper answer:


1. Definition: Del credere commission is a type of additional commission paid to an agent or intermediary in a sales transaction to provide a guarantee of payment from the buyer. The agent, known as a del credere agent, assumes the credit risk of the buyer defaulting on payment.


2. Role of Del Credere Agent: A del credere agent acts as a guarantor between the principal (seller) and the buyer. They guarantee the payment of goods sold on credit by taking on the risk of non-payment in case the buyer fails to fulfill their payment obligations.


3. Compensation: In return for assuming the credit risk, the del credere agent receives a higher commission than a regular agent. This additional commission, known as the del credere commission, serves as compensation for the extra risk undertaken.


4. Risk Mitigation: The del credere commission is a risk mitigation mechanism for the principal. By involving a del credere agent, the principal transfers the risk of non-payment to the agent, thereby reducing the potential loss associated with bad debts.


5. Liability: In the event of non-payment by the buyer, the del credere agent becomes liable to the principal for the amount due. The agent is responsible for making the payment to the principal, even if they are unable to recover the amount from the buyer.


6. Credit Assessment: The del credere agent performs a credit assessment of the buyer to determine their creditworthiness before accepting the del credere arrangement. This assessment helps in evaluating the buyer's ability to fulfill payment obligations.


7. Legal Relationship: The relationship between the del credere agent and the principal is typically governed by a del credere agreement or contract. The agreement outlines the rights, responsibilities, and liabilities of both parties in the del credere arrangement.


8. Scope of Coverage: The del credere commission may cover the entire credit period or a specific duration as agreed upon between the principal and the del credere agent. The coverage period determines the agent's liability in case of default.


9. Accounting Treatment: In the books of accounts, the del credere commission is treated as a separate expense and recorded as part of the selling expenses. It is usually accounted for separately to track the cost associated with assuming credit risk.


10. Benefits and Limitations: The del credere commission provides several benefits to the principal, including risk transfer, improved cash flow, and access to credit sales. However, it also has limitations, such as higher costs for the principal and the need for a trustworthy and creditworthy del credere agent.


In conclusion, del credere commission is an additional commission paid to an agent to assume credit risk on behalf of the principal. The del credere agent guarantees payment from the buyer and receives compensation for undertaking the additional risk. Understanding the concept, role, benefits, and limitations of del credere commission is important for exam preparation in commerce, finance, or business management courses.

Comments

Post a Comment

Popular posts from this blog

BCS-011 ,Block 1,Important Questions with answers with Block wise.

By -
Image
Important Questions with answers BCA BCS-0011.  Computer basic and pc software [sem-1] 👉👉👉 Join Telegram group 👉👉👉 Subscribe YouTube channel BLOCK 1          👉👉👉👉 Question 1. Explain the von Neumann's architecture with the help of a diagram. Answer . Von Neumann architecture is a design concept for building digital computers that consists of several key components. The architecture was proposed by the mathematician and computer scientist John von Neumann in the late 1940s. It serves as the foundation for most modern computer systems.  Here is a simplified diagram illustrating the von Neumann architecture: Let's through each component : 1. ** Memory **: This is the storage area where both data and instructions are stored. It can be divided into two parts: the **data memory** for storing data and the **instruction memory** for storing program instructions. 2. ** Control Unit **: This component manages and coordinates the activities of other components in the computer.
Read more

BCA MCS-011 BLOCK 1 Important Questions with answers

By -
Image
BCA, MCS011  Problem solving                and programming 👉👉👉👉👉Join Telegram group                  (C Language)[Sem-2] 👉👉👉 Subscribe YouTube channel        Important Questions with                                answers         Block 1          🤔🤔 Question 1. Draw flowchart with an algorithms of each? . The given number is prime number or not? . The given number is factorial number? Answer. Here are the flowcharts for determining whether a given number is prime or not ? and whether it is a factorial number? Flowchart for Prime Number:   Algorithm for Prime Number: 1. Start the algorithm 2. Take the input number. 3. Check if the number is less than or equal to 1. 4. If the number is less than or equal to 1, it is not a prime number. 5. If the number is greater than 1, iterate from 2 to the square root of the number. 6. For each iteration, check if the number is divisible by the current iteration. 7. If the number is divisible by any iteration, it is not a prime number. 8.
Read more

MCS012 Explain the immediate addressing and indirect addressing

By -
Image
 IGNOU BCA second semester subject MCS12 IMPORTANT Questions with answers Question: Explain the immediate addressing and indirect addressing with the help of one example of each. Answer 👇 Immediate addressing : Immediate addressing is a method of addressing in computer programming where the actual value is directly provided as part of the instruction itself. In this mode, the operand is specified within the instruction, and the CPU directly uses that value for the operation. This means that the data is not fetched from memory or another register. Example : Let's say we have a simple assembly instruction that adds the value 10 to a register called "A". The instruction might look like this: ADD A, 10 In this example, the number 10 is provided directly in the instruction itself. When the CPU encounters this instruction, it immediately adds the value 10 to the contents of register A without fetching the data from memory. Indirect Addressing : Indirect addressing is a method
Read more

Write short note on Dual Aspect Concept

By -
#ignou BCA ECO02 previous year question with answer. 👉👉👉 Join Telegram group 👉👉👉 Subscribe YouTube channel Question.Write short note on Dual Aspect Concept Dual Aspect Concept, also known as Dual Aspect Principle or Dual Aspect Assumption, is a fundamental accounting concept that forms the basis for recording financial transactions in double-entry bookkeeping systems. It is an important principle in accounting that recognizes the duality of transactions, stating that every transaction has two aspects or effects on a company's financial position. The Dual Aspect Concept is based on the accounting equation, which states that assets equal liabilities plus equity. According to this concept, every transaction affects at least two accounts, with one account debited and another account credited. The total debits must always equal the total credits in any given transaction, ensuring that the accounting equation remains in balance. Key points related to the Dual Aspect Concept: 1. Dou
Read more

ECO02 IGNOU BCA second semester some important topics short notes

By -
Question 1.What is the Dual Aspect concept ? Answer. 👉👉👉👉 Subscribe YouTube channel 👉👉👉👉 Join Telegram group Dual Aspect Concept, also known as Dual Aspect Principle or Dual Aspect Assumption, is a fundamental accounting concept that forms the basis for recording financial transactions in double-entry bookkeeping systems. It is an important principle in accounting that recognizes the duality of transactions, stating that every transaction has two aspects or effects on a company's financial position. The Dual Aspect Concept is based on the accounting equation, which states that assets equal liabilities plus equity. According to this concept, every transaction affects at least two accounts, with one account debited and another account credited. The total debits must always equal the total credits in any given transaction, ensuring that the accounting equation remains in balance. Key points related to the Dual Aspect Concept: 1. Double-entry system: The Dual Aspect Concept is
Read more

Write short note on Petty cash Book.

By -
 #ignou BCA second semester subject ECO 02 previous year question with answer Question.Write short note on Petty cash Book. 👉👉👉 Join Telegram group 👉👉👉 Subscribe YouTube channel Answer The petty cash book is a specialized accounting record used to track and control small, routine cash expenses within an organization. It is particularly relevant for exam paper answers related to cash management and internal controls. Here are some important points to note about the petty cash book: 1. Definition : The petty cash book is a subsidiary book that records small cash transactions, typically referred to as petty cash expenses. These expenses are usually small in value and occur frequently, such as minor office supplies, postage, or refreshments. 2. Purpose : The primary purpose of the petty cash book is to provide a systematic and organized method for recording, monitoring, and controlling small cash expenditures. It allows for better tracking and accountability of petty cash transaction
Read more

Write short note on Promissory Note.

By -
 #ignou BCA second semester subject ECO 02 previous year question with answer Write short note on Promissory Note. 👉👉👉 Join Telegram group 👉👉👉 Subscribe YouTube channel Answer. A promissory note is a legal financial instrument that contains a written promise from one party, known as the issuer or maker, to pay a specified sum of money to another party, known as the payee or holder, at a predetermined future date or upon demand. Here are some important points to note about promissory notes for an exam paper answer: 1. Definition : A promissory note is a written document that serves as a legally binding promise to repay a debt. It is a formal acknowledgment of a debt obligation and outlines the terms and conditions of repayment. 2. Parties Involved : There are two parties involved in a promissory note: the issuer/maker and the payee/holder. The issuer is the individual or entity who promises to pay the debt, while the payee is the individual or entity who will receive the payment.
Read more

MCS12 What is Scan code in the context of a keyboard 2. Impact printer.

By -
Image
IGNOU BCA second semester MCS012 theory important Questions with answers 👉 Join telegram group 👉 Subscribe YouTube channel Question Define the following terms: 1. Scan code in the context of a keyboard 2. Impact printer. Answer 1. Scan code in the context of a keyboard: In the context of a keyboard, a scan code refers to a unique identifier assigned to each key on a keyboard. When a key is pressed or released, the keyboard's hardware generates a scan code corresponding to that key. The scan code is then sent to the computer, which interprets it and performs the appropriate action, such as displaying the corresponding character on the screen or triggering a specific function associated with that key. Scan codes are typically standardized to ensure compatibility across different keyboards and computer systems. 2. Impact printer : An impact printer is a type of printer that creates printed output by physically striking an inked ribbon against the paper. These printers work by using
Read more

IGNOU MCS012 What is the layout of magnetic disk and physical characteristics of magnetic disk

By -
Image
IGNOU BCA second semester MCS012 Theory important Questions with answers 👉👉 Join Telegram group 👉👉 Subscribe YouTube channel Disk Layout & Characteristics Question Explain the disk layout of magnetic disk. Also, explain the physical characteristics of magnetic disk. Answer The disk layout of a magnetic disk refers to the organization and structure of the data on the disk. Magnetic disks, such as hard disk drives (HDDs), consist of multiple platters stacked on a spindle. Each platter is coated with a magnetic material and is divided into concentric circles called tracks. These tracks are further divided into smaller units called sectors. The arrangement of tracks and sectors forms a grid-like pattern on the disk surface. The disk layout typically follows a cylindrical geometry, where corresponding tracks on each platter are aligned vertically. This arrangement allows the read/write heads to move across multiple platters simultaneously, improving data access speeds. The physical
Read more

Write any five differences between consignment and joint venture.

By -
  Write any five differences between consignment and joint venture. 👉👉👉 Join Telegram group 👉👉👉 Subscribe YouTube channel Answer  Consignment and joint venture are two distinct business arrangements with different characteristics and objectives. Here are five key differences between consignment and joint venture: 1. Nature of Relationship :    - Consignment: In consignment, there is a principal-agent relationship. The consignor (principal) sends goods to the consignee (agent) for sale on behalf of the consignor. The consignee does not have ownership rights over the goods but acts as an intermediary.    - Joint Venture: Joint venture involves a collaborative partnership between two or more parties to undertake a specific business project or venture. The parties contribute capital, resources, and expertise and share both the risks and rewards of the venture. It is a more equal and cooperative relationship between the partners. 2. Ownership and Control:    - Consignment: In a consig
Read more