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Help me in a complex journal entry !

jafer (studies) (194 Points)

02 August 2012

Hi everybody ! kindly, help me journalizing the following entry !

Our client is an service provider, and earns money on commission basis.

He had opening balance of 10000 rs. Now, this year he gets money for the last year's services.

"if i try to pass entry like cash a/c dr to commission a/c then the amout has to be deducted as well from the debtors right! so, if i pass cash a/c dr to su. debtors a/c then the commission received will not appear in credit side of p&l a/c. Hence, what entry is right ! " especially, if i have to pass entries in tally. thanx

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24 Replies

Arka Bose (None) (313 Points)
Replied 02 August 2012

You earn commission or your client earns? I am confused?

Ramesh Babu (JM(F&A)) (62 Points)
Replied 02 August 2012

Cash A/c Dr XXX (money received now)

To Debtor A/c XXX (previous year receivable amount)

To Commission A/c XXX

Varshit Shah (Self Employed) (676 Points)
Replied 02 August 2012

As you are saying ur client is having an opening balance , it means u have considered this income in earlier month or year. If it is so then u are not required to credit commssion a/c. Then your entry will be
Cash/Bank A/c............. Dr
      to Debtors A/c.

Now if you have not considered this income earlier in books of account then your entry should be...
Debtors A/c.............Dr
   To Commssion A/c

Cash/Bank..............Dr
   To Debtors A/c

I hope you got the logic. If u still have any doubts.....then feel freto ask.

Regards

Varsh*t Shah

2 Like

Nagarajan DK (CA) (103 Points)
Replied 02 August 2012

Varsh*t is right,

Please clarify which account your client having Rs.10000 balance.......

CA Sanjay Bag (CHARTERED ACCOUNTANT) (3340 Points)
Replied 02 August 2012

First clarify your question

Tejas Shah (Deputy Manager ( Finance & Accounts )) (211 Points)
Replied 02 August 2012

VArsh*t Shah is Right.

DEEPA VYAS (CA ) (2039 Points)
Replied 02 August 2012

Varsh*t shah is correct.

VIKAS SRIVASTAVA (CA- FINAL) (90 Points)
Replied 02 August 2012

i agree with mr. shah, u must have credited comm. a/c against the debtor in prev. yr now u r getting pmt of o/s balance so the entry should be likeone;

casha/c dr. **

to dedtor **

Sarita (Article) (154 Points)
Replied 02 August 2012

Cash A/c.........Dr.

To Sun.Dr's A/c

Bijoy (SAP FICO) (48 Points)
Replied 02 August 2012

As you have mentioned commission is the revenue generator (sales) for the firm.

So , previous year definitely they will account the revenue, when the service provided.(thats y op. balance for Debtor) So

this year it shoul be, when cash received;

Dr Cash A/c

Cr. Debtor A/c

Thank you

Mukesh Babu (IPCC Student) (236 Points)
Replied 02 August 2012

The entry is

Cash A/c Dr

to Debtors A/c

The reason for non applicability of

cash a/c dr

to commission a/c

is the Commission A/cis already credited in P&L A/c on last year as the Entry

Debtors A/c Dr.

to Commission A/c thats y commission A/ cwill not come.