Commission paid on Sales

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

28 December 2009 Dear All,
Please let me know the accounting effect of the commission paid on sales to a distributor...

how the same is to be disclosed in the financial statements, basically its presentation. Currently the said commission is added in my sales bill itself coz i need to take a transaction value for excise purpose in my sales bill.

According to my point of view the same is not my income and hence should not be added to my sales(income)afftecting my gross profit and overstatement of my income(for presentation in my books).

Kindly advice me on the above matter ASAP..

Regards

Arjuna Raina

Arjuna Raina (Expert)
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28 December 2009 Under the accrual basis of accounting sales commissions expense should appear on the income statement in the same period that the related sales are reported, regardless of when the commission is actually paid. In the same way, the cost of goods sold is matched with the related sales on the income statement, regardless of when the supplier of the merchandise is paid.

Querist : Anonymous

Querist : Anonymous (Querist)

09 January 2010 i agree wid u arjuna but can u please let me knw it presentation in P/L A/c......