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Commission received in advance is to be shown in statement of affairs on
- a)Cash balance
- b)Total assets
- c)Total liabilities
- d)Liabilities side
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Commission received in advance is to be shown in statement of affairs ...
Commission received in advance mean unearned income and it relate to next year but in statement of affair current year transaction are recorded so it is a liability
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Commission received in advance is to be shown in statement of affairs ...
Statement of Affairs and Commission Received in Advance
Statement of Affairs is a statement that shows the financial position of a business at a particular point in time. It shows the assets, liabilities, and capital of the business. Commission received in advance is a liability of the business because the business has received the commission but has not yet earned it. Therefore, it needs to be shown in the statement of affairs.
Liabilities Side
The liabilities side of the statement of affairs shows the amount the business owes to others. It includes current liabilities and long-term liabilities. Commission received in advance is a current liability because it will be earned within a year. It needs to be shown on the liabilities side of the statement of affairs.
Example
Let's assume that a business received a commission of $10,000 in advance for services that it will perform in the future. The commission is due to be earned over the next 6 months. The statement of affairs will show the commission received in advance as a current liability on the liabilities side of the statement of affairs. The statement of affairs will look like this:
Liabilities
Commission received in advance $10,000
Conclusion
In conclusion, commission received in advance needs to be shown in the statement of affairs on the liabilities side. It is a current liability because it will be earned within a year. The statement of affairs is an important financial statement that shows the financial position of a business at a particular point in time.
Statement of Affairs is a statement that shows the financial position of a business at a particular point in time. It shows the assets, liabilities, and capital of the business. Commission received in advance is a liability of the business because the business has received the commission but has not yet earned it. Therefore, it needs to be shown in the statement of affairs.
Liabilities Side
The liabilities side of the statement of affairs shows the amount the business owes to others. It includes current liabilities and long-term liabilities. Commission received in advance is a current liability because it will be earned within a year. It needs to be shown on the liabilities side of the statement of affairs.
Example
Let's assume that a business received a commission of $10,000 in advance for services that it will perform in the future. The commission is due to be earned over the next 6 months. The statement of affairs will show the commission received in advance as a current liability on the liabilities side of the statement of affairs. The statement of affairs will look like this:
Liabilities
Commission received in advance $10,000
Conclusion
In conclusion, commission received in advance needs to be shown in the statement of affairs on the liabilities side. It is a current liability because it will be earned within a year. The statement of affairs is an important financial statement that shows the financial position of a business at a particular point in time.
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Commission received in advance is to be shown in statement of affairs ona)Cash balanceb)Total assetsc)Total liabilitiesd)Liabilities sideCorrect answer is option 'D'. Can you explain this answer?
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Commission received in advance is to be shown in statement of affairs ona)Cash balanceb)Total assetsc)Total liabilitiesd)Liabilities sideCorrect answer is option 'D'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Commission received in advance is to be shown in statement of affairs ona)Cash balanceb)Total assetsc)Total liabilitiesd)Liabilities sideCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Commission received in advance is to be shown in statement of affairs ona)Cash balanceb)Total assetsc)Total liabilitiesd)Liabilities sideCorrect answer is option 'D'. Can you explain this answer?.
Commission received in advance is to be shown in statement of affairs ona)Cash balanceb)Total assetsc)Total liabilitiesd)Liabilities sideCorrect answer is option 'D'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Commission received in advance is to be shown in statement of affairs ona)Cash balanceb)Total assetsc)Total liabilitiesd)Liabilities sideCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Commission received in advance is to be shown in statement of affairs ona)Cash balanceb)Total assetsc)Total liabilitiesd)Liabilities sideCorrect answer is option 'D'. Can you explain this answer?.
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