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    hotrod2's Avatar
    hotrod2 Posts: 1, Reputation: 1
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    #1

    Oct 3, 2007, 05:17 PM
    Draws on Commissions should be what kind of an account?
    What kind of an account should Draws on Commissions be for salesmen? It is currently entered as "Other Current Assets" and I have been told it should be an expense account.
    jdeshayes's Avatar
    jdeshayes Posts: 5, Reputation: 1
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    #2

    Oct 3, 2007, 05:33 PM
    Well, it sounds like these are possibly an advance against the commissions that salespeople would earn. If that's the case, then yea, it would be a current asset (because you'd presumably getting it credited against commissions they earn).

    So, if they take a draw, you debit "Draws on Commissions", credit cash.
    When they actually earn the commission, you debit Commission Expense, then credit the Draws on Commissions.

    However, if it is just the commission, then it would be an expense.
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