Which type of account is commission received account?

Which type of account is commission received account?

Commission received is Nominal Account.

What is commission received account?

An account used to record commissions received by an organization. In a double-entry system, the commissions received account will be credited and the bank account (or the debtors’ account until it is received) is debited. This account may be combined with the commissions paid account.

Is commission received a nominal account?

(v) Commission Account is a Nominal but Outstanding Commission Account is a Personal Account; Commission Received in Advance Account is also a personal Account.

What is commission received classified as?

Commissions received by a company are a form of revenue. A company may receive commissions when it promotes or sells products or services on behalf of another company, such as serving as a broker for the manufacturer of a good. Commissions paid out by a company are an expense.

Why commission received is nominal account?

Explanation: A nominal account includes all the accounts of incomes and expenses of a business. Commission received represents an income of the business and is credited to the Profit & Loss A/c, following the rule of nominal account.

How is commission received recorded?

In cases where a company earns a sales commission, it is reported as revenue in the income statement. It is normally classified as operating revenue if the commission earned is part of the core operations of the business. Otherwise, it is classified as other income.