Question

Out of commission received this year rs 5000 relates to next year journal

Answer 1

Answer:

It will be a prepaid expense.

Explanation:

Prepaid Expenses are those expenses which are paid in advance and that is not related to the current accounting year, paid for the next accounting year.

As it is paid in advance, it will be a prepaid expense. And its journal entry for prepaid expenses is as:

Prepaid Expense A/c...........Dr  XXXX

         To Expense A/c...............Cr  XXXX

(Being Expense paid in advance)

The journal entry will be for commission received this year is relates to next year :

Prepaid Commission A/c...........Dr    Rs 5,000

               To Commission A/c...........Cr  Rs5,000