What is Commission Received In Advance - Definition And Meaning - Journal Entry

Commission received in advance or Unearned commission or Prepaid Commission is that Revenue which you received in advance from company but you need to deliver the services for that amount received in advance. It is an example of Unearned Revenue.or Revenue Received In Advance. It is a Current Liability as the services needed to be delivered to the company for the payment received in advance.

Commission Received In Advance Journal Entry

For Example, for the month, you as a service company received advance commission from the management of the company, then following Entry is passed as shown below:

                                 Cash a/c  XXX

                                                 Commission Received In Advance a/c  XXX

                                            (Advance Commission Received)

After that, when you actually delivers the services for the advance commission received, then following Adjusting Entry is recorded in the Books of Accounts:

 Commission Received in Advance a/c  XXX

                                                            Commission Received a/c  XXX

                               (Advance Commission Received now actually earned)

Commission Received In Advance Is which Type Of Account?

It is a current liability to be shown on the Balance Sheet.