Question

commission earned but not yet received where to be posted in final account​

Answer 1

Answer: Adjustment Entries for Accrued Income in Final Accounts

Explanation:

Accrued income is an amount earned but not actually received during the accounting period or till the date of preparation of Final Accounts for the period concerned. Such an income receivable is also called income earned but not received or income accrued or income due and outstanding.

For instance, interest on investments, rent from sub-letting, commission on sales etc., earned by the busi­ness during a particular accounting period but might not have been received so far. Thus such out­standing income needs adjustment when Final Accounts are prepared. For instance, commission has been earned but not received Rs 100.

The double effect of accrued income is:

1. It is credited to the Profit & Loss Account

2. It is shown in the asset side of the Balance Sheet.