04-19-2011, 10:22 PM
salam..
Bijith
my understanding is
if u have made sales of $100 for Cash and the commission is, say, $10 for that (and is payable), the entries for this transaction will be
1) Cash $100 Dr.
Sales $100 Cr.
-----------------------
2) Commission $10 Dr.
Commission P/A $10 Cr.
-----------------------
now when commission is paid to the agent, the entry will be
3) Commission P/A $10 Dr.
Cash $10 Cr.
-----------------------
the commission a/c is balanced, like u have no balance at the year end..
this is my understanding!!!
Dard..
Sales is Revenue, isn't it be reflected at the Gross Amount coz Revenue is always reflected at the gross amount?
like, we should not decrease our sales of $100 to $90 (in this scenario)... sales should be reported at its original figure instead of netting off the sales..
Further discussion will be beneficial for students like me!
Regards.
Bijith
my understanding is
if u have made sales of $100 for Cash and the commission is, say, $10 for that (and is payable), the entries for this transaction will be
1) Cash $100 Dr.
Sales $100 Cr.
-----------------------
2) Commission $10 Dr.
Commission P/A $10 Cr.
-----------------------
now when commission is paid to the agent, the entry will be
3) Commission P/A $10 Dr.
Cash $10 Cr.
-----------------------
the commission a/c is balanced, like u have no balance at the year end..
this is my understanding!!!
Dard..
Sales is Revenue, isn't it be reflected at the Gross Amount coz Revenue is always reflected at the gross amount?
like, we should not decrease our sales of $100 to $90 (in this scenario)... sales should be reported at its original figure instead of netting off the sales..
Further discussion will be beneficial for students like me!
Regards.
