what catorgorie does commissions fall in:
A)income statement
B)statement of changes in owner equity
C)balance sheet
i think a
what catorgorie capital falls in:
A)income statement
B)statement of changes in owner equity
C)balance sheet
i think b
I think you're right -- both answers.
To determine the correct category for commissions and capital, we need to understand the purpose and nature of these items.
Commissions typically refer to the fees or compensation paid to salespersons, agents, or brokers for selling goods or services. Commissions are considered a variable expense directly related to generating revenue. Therefore, commissions are generally categorized under the "Income Statement," also known as the "Profit and Loss Statement" or "Statement of Earnings." This statement summarizes a company's revenues, expenses, gains, and losses over a specific period of time, and commissions are recorded as an expense.
On the other hand, capital refers to the financial resources or investments contributed by the owners or shareholders of a company to start or maintain the business operations. Capital is a part of the company's equity, which represents the owners' claim on the company's assets after deducting liabilities. Consequently, capital is usually reported in the "Balance Sheet." The balance sheet provides a snapshot of a company's financial position at a particular point in time, presenting its assets, liabilities, and equity.
So, based on your descriptions:
Commissions would fall under:
A) Income Statement
Capital would fall under:
C) Balance Sheet