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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4543
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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On an unrecoverable draw, how is the commission accounted

Customer Question

On an unrecoverable draw, how is the commission accounted for? How is accounted for in future If the employee earns commissions?
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: For a sales representative on an unrecoverable draw, how do you account for future commissions in your accounting books?
JA: Is there anything else important you think the Accountant should know?
Customer: nope
Submitted: 9 months ago.
Category: Finance
Expert:  Rakhi Vasavada replied 9 months ago.

Dear Friend,

Hello and welcome. Thank you for providing an opportunity to assist you.

When a person draws, you would account as under:

Draws on Commissions A/c DR

Having said this, when a person actually earns the commission, you would record it as under:

Commission Expense A/c DR
To Draws on Commissions.

The above entries are for unrecoverable draws.

I am sure this would help.

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