Question

Write a journal entry reflecting the affect of adjustment in periodic statment (i.e,Trading & P/ L A/C ) when books of accounts are closed with respect to commission received in advance.

Answer 1

Dear Student,

When commission would have been received in advance, then the entry would have been

Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
Cash/Bank A/c		Dr
To Commission received in Advance A/c [liability A/c]
(Being commission received in advance )

Now after the closure of books of accounts, adjustment entry would be as follows:

Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
Commission received in Advance A/c [P&L A/c]		Dr
To Commission received A/c
(Being commission income recognised )

Regards,