what catergorie capital and comission fall under. i think capital is owner equity and comission is income statement.
To determine the appropriate category for "capital" and "commission," we need to understand the basic accounting classifications.
Capital: In accounting, "capital" generally refers to the funds invested in a business by its owners or shareholders. It represents the ownership interest or equity in the company. Capital is commonly categorized under "Owner's Equity" on the balance sheet.
Commission: "Commission" typically represents a form of income earned by salespersons or agents for facilitating sales transactions. It is often a percentage of the sales value. Commission income is recorded as revenue or income on the income statement.
So, your initial understanding is generally correct:
- Capital falls under the category of "Owner's Equity" on the balance sheet.
- Commission falls under the category of "Revenue" or "Income" on the income statement.
When categorizing financial items, it's essential to consult the specific accounting standards and practices applicable to your business or jurisdiction, as they can vary.