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Q7(1)PSB

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Financial & Managerial Accounting
Found in: Page 160
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.

A. Current assets E. Current liabilities

B. Long-term investments F. Long-term liabilities

C. Plant assets G. Equity

D. Intangible assets

1. Commissions earned

The correct answer is Z.

See the step by step solution

Step by Step Solution

Definition of Commission

The amount earned by an individual or organization as a middle party for providing any service on a percentage basis of the sales or service are known as commission.

Reason for choice

Commission earned is a revenue item and appeared in the income statement as a credit balance, Hence, it cannot appear anywhere in the balance sheet, but it is adjusted in the net income that appears under shareholder’s equity section.

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