Accounting Entry On Journal?
I have 2 questions.
*When they say I purchased 3500 in equipment, does purchase usually mean its on credit?
*How do you go about recording this transaction. Entered into contract with Southside Food Vendors to place vending machines in the waiting room. Fred is to receive 10% of all sales with a minimum of $200 monthly. And received this in advance.
Can someone please help me?
Tags: Accounting, Entry, Journal
November 20th, 2009 at 1:40 pm
A “purchase” can be cash or credit so you will credit either your cash or accounts payable account and debit you expense/purchases account for $3500.
Credit you cash account $200 and debit your expense/commissions account $200. Make a note that the commission is an advance for the month it is effective.
November 20th, 2009 at 7:07 pm
*When they say I purchased 3500 in equipment, does purchase usually mean its on credit?
No, it doesn’t. U shd be told whether it’s on credit or for cash
*How do you go about recording this transaction. Entered into contract with Southside Food Vendors to place vending machines in the waiting room. Fred is to receive 10% of all sales with a minimum of $200 monthly. And received this in advance.
Since we don’t know in advance how much the sales will be, we can only assume that Fred was paid just the minimum, so
Dr Prepaid commission $200
Cr Cash $200