Question

Accounting entry for Manager's Commission (outstanding) on net profits will be made as _______________.

• A. Outstanding Manager's Commission A/c To Commission A/c
• B. Outstanding Manager's Commission A/c To Profit and Loss A/c
• C. Profit and Loss A/c To Outstanding Manager's Commission A/c
• D. None of the above

Answer 1

Answer: (C)

Profit and Loss A/c To Outstanding Manager's Commission A/c

Outstanding expenses are those expenses which are due but not paid. At the end of the financial year, an adjustment entry need to be passed in books of account by debiting the respective expenses account and crediting the outstanding expenses account.

In case of outstanding Manager's commission, the accounting entry will be as under:

Profit & Loss A/c Dr. (To be shown in debit of P&L)

To Outstanding Manager's Commission (To be shown as liability)