264 Insurance Commissions Receivable
Assets
Receivables
Synopsis
Account 264 is established to record the amount of Insurance Commissions owed to the dealership from various Insurance Companies for policies sold to customers.
Debits |
Credits |
|
|
Example 1
Record $495 insurance commissions earned for the month of which $250 is earned for new and $245 is earned for used. These commissions had not been previously accrued.
Journal: Standard Entries Journal
Entry: |
|
Debit |
Credit |
Account 264 |
Insurance Commissions Receivable |
$495 |
|
Account 807 |
Insurance Commissions Earned – New |
|
$250 |
Account 809 |
Insurance Commissions Earned – Used |
|
$245 |
Example 2
Record the $495 payment from the insurance company for the above commissions earned.
Journal: Cash Receipts
Entry: |
|
Debit |
Credit |
Account 201 |
Cash on Hand |
$450 |
|
Account 807 |
Insurance Commissions Earned – New |
$25 |
|
Account 809 |
Insurance Commissions Earned – Used |
$20 |
|
Account 264 |
Insurance Commissions Receivable |
|
$495 |
Comments
A debit balance represents unpaid insurance commissions due from insurance companies.
Note:
The month-end balance should be reconciled with the periodic insurance company statements. Any difference should be determined and corrected.