Have an account?

Sign In

For the sake of quality, our forum is currently "Restricted" to invitation-only. In case if you wish to join our forum, please send an email seeking an invitation to "[email protected]".

Don't have account,

Forgot Password

Lost your password? Please enter your email address. You will receive a link and will create a new password via email.

Captcha Click on image to update the captcha.

Have an account?

You must login to ask question.

Need An Account,
Home/Questions/Q 61102
Next
In Process
Sapna Takia
In:

What is journal entry for commission received?

commission receivedjournal entry
Share

    1 Answer

    1. Commission Received refers to a percentage amount received by the company (or) an individual on the total sales incurred. It is an indirect income/revenue recorded on the credit side of profit and loss account. The term “commission” is more likely used in the stock market which is paid to a broker on the sale of shares (or) securities.

      Journal Entry for Commission Received

      Nowadays many organization uses a bank account for every business transaction i.e., either to make or receive payment. The journal entry on the commission received can be recorded in two different approaches of accounting. They are

      1. Traditional Accounting Approach

      ParticularsL.F.AmountNature of AccountAccounting Rule
      Bank a/c XXXPersonalDebit- The Receiver
       To Commission Received a/c  XXXNominalCredit- All Incomes and Gains

      (Being commission received)

      2. Modern Accounting Approach

      ParticularsL.F.AmountNature of AccountAccounting Rule
      Bank a/c XXXAssetDebit- The Increase in Asset.
       To Commission Received a/c  XXXIncomeCredit- The Increase in Income.

      (Being Commission received)

      Example

      On 1st March, Anna Ltd. received a commission amounting to 70,000 through cheque. Journalise the following transaction.

      DateParticularsL.F.AmountNature of AccountAccounting Rule
      1st MarchBank a/c 70,000AssetDebit- The Increase in Asset
        To Commission Received a/c  70,000IncomeCredit- The Increase in Income.

      (Being commission received through cheque)

      • 0

    Leave an answer