Journal Entry for Commission Received:

Introduction:
When a business earns commission income, it needs to record the transaction in its accounting records. Commission is a fee earned by a person or a business entity for facilitating a transaction, such as selling goods or services on behalf of another party. The commission received is considered as revenue for the business and needs to be recorded accurately to ensure proper financial reporting. In this journal entry, we will discuss the entry for commission received amounting to ₹500.

Journal Entry:
The journal entry for commission received involves two accounts: Cash/Bank and Commission Income. The following steps outline the process of recording the journal entry:

Step 1: Identify the Accounts Affected:
The accounts affected by the commission received transaction are:
1. Cash/Bank: This account represents the inflow of cash into the business.
2. Commission Income: This account represents the revenue earned by the business through commission.

Step 2: Determine the Amount:
In this case, the commission received is ₹500.

Step 3: Record the Journal Entry:
The journal entry for commission received of ₹500 is as follows:

Commission Income Account Debit ₹500
Cash/Bank Account Credit ₹500

Explanation:
- The Commission Income account is debited with ₹500 to record the increase in revenue.
- The Cash/Bank account is credited with ₹500 to record the increase in cash.

Summary:
The journal entry for commission received of ₹500 involves debiting the Commission Income account and crediting the Cash/Bank account. This entry accurately records the revenue earned by the business through commissions and the corresponding increase in cash. It is essential to record this transaction accurately to maintain proper financial records and facilitate accurate financial reporting.