Journal Entry and Ledger Posting for Commission Expenses paid by Cash

Commission is an expense which is paid to a person for achieving any target or for his work done/service rendered.

Generally Commission based employee/person helps in the growth of Sales/Service.

They are one part of Revenue Generator for a Business.

Now let's discuss about what will be the Journal Entry and Ledger posting, when Commission is paid by Cash.

When Commission is paid by Cash, the following Debit Ledger and Credit Ledger Accounts are affected.

Debit Ledger is :

• Commission Account

Credit Ledger is :

• Cash Account

Journal Entry

Ledger Posting

In Commission Ledger Account

 In Cash Account

Example : 

In the Books of M/s.Sawan Agrotech, Commission paid by Cash to Mr.Suraj Tripathy for ₹9,600/- on dt.31/07/2022 for achieving his Sales target.

Pass necessary Journal Entry and post them into their respective Ledger Account for the above transaction.

In the above transaction,

Debit Ledger is :

• Commission Account

Credit Ledger is :

• Cash Account

Journal Entry

Ledger Posting

In Commission Ledger Account

In Cash Account