Loading /Surplus

The difference between cost price and invoice price of goods sent of consignment is called loading.

Depreciation

The process of allocating the cost of fixed asset over its estimated useful life is called depreciation.

The major causes of depreciation area unit as follows:

1. Wear And Tear wear and tear discuss with a decline within the efficiency of plus owing to its constant use. once an asset losses its efficiency, its worth goes down and depreciation arises. this is often true just in case of tangible assets like plant and machinery, building, furniture, tools and equipment utilized in the plant.

2. Effusion of your time the worth of asset might decrease due to the passage of your time though it's not in use. There area unit some intangible fixed assets like copyright, patent right, and lease hold premises that decrease its value as time elapse.

3. Exhaustion an asset might loss its value due to exhaustion too. this is often the case with wasting assets like mines, quarries, oil-wells and forest-stand. On account of continuous extraction, a stage can return wherever mines and oil-wells get fully exhausted.

4. obsolescence Changes in fashion area unit external factors that area unit responsible for throwing out of assets though those are in physical fitness. for instance black and white televisions became obsolete with the introduction of color TVs, the users have discarded black and white TVs though they're in good condition. like loss on account of recent invention or modified fashions is termed as obsolescence.

Value of unsold stock

Value of unsold stock = cost price of closing stock + Proportionate of non-Recurring expenses (consignor & Consignee)

Value of unsold stock = = (Cost of goods sold+Proportionate of all expenses/Total Quantity) X unsold stock

Performa Invoice

A statement which is sent by consignor to consignee with details about quality, quantity and price to guiding the consignee for sale of goods is called Performa invoice. 

A pro forma document is provided prior to of AN actual dealing. Such a document is a model for the particular documents of the dealing. for instance, once a replacement corporation is visualised, its founders might prepare a business arrange containing professional forma monetary statements, like projected money flows and financial gain statements.

In Foreign trade transactions, a professional forma (or proforma) invoice may be a document that states a commitment from the vendor to order some merchandise to be oversubscribed to an exact person, the buyer. the client places AN order and if the vendor agrees, it extend a proforma invoice; once the client receives this invoice and agrees to any or all the terms laid out in it, the products square measure sent and also the proforma is replaced by an advertisement invoice (the definitive document). A proforma invoice does not establish any obligation of transfering cash from the client to the vendor.

Stock on Consignment

Good unsold at the time of sending account sales by the consignee to the consigner is called stock on consignment.

If you raise somebody United Nations agency has recently made a house, its value, what would he/she say? they might think the quantity they need spent on shopping for land, registration charges paid, materials for construction, labour payments, etc., add up identical and categorical that figure (sum) as its price.

Overriding Commission

An additional commission which is paid by consignor to consignee for introducing new product in the market is called overriding commission.

Overriding commission is commission that's earned  by the field office manager and is predicated upon the business that's created by the agents within the workplace. as an example, within the insurance trade, it's a commission paid to agents who have exclusive territorial or class-of-business agreements with an insurance company, for all policies written in their territory or for that class of business, even though the business is written by other agents.

Overriding commission is that portion of a commission received and preserved by a general agent once paying the opposite portion to a manufacturing agent whose business is supervised by that general agent. also known as overwriting commission.

Del Credere Commission

An additional commission paid to consignee who guarantees for payment in case of credit sale is called del credere commission.

An agreement by that an agent or issue, in thought of a further premium or commission (called a del credere commission), engages, once he sells merchandise on credit, to insure, warrant, or guarantee to his principal the solvency of the client, the engagement of the issue being to pay the debt himself if it's not punctually discharged by the client when it becomes due.