The company or person earning and receiving commissions will have commissions revenue. The company or party that pays the commissions will have commissions expense.

Under accrual accounting, the commissions do not have to be received in order to be reported as revenues. If a company has earned the commissions but has not yet received the money, it will report Commissions Revenues on its income statement and Commissions Receivable as an asset on its balance sheet.

Under accrual accounting, the commissions do not have to be paid in order to be reported as expense. If a company has incurred the commissions expense, but has not yet paid the commissions, it will report Commissions Expense on its income statement and Commissions Payable (or include the commissions as part of Accounts Payable) as a liability on its balance sheet.

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