What expense category are commissions?

There is no definitive answer to this question, as commissions can be classified as either a direct or an indirect expense. However, the most common expense category for commissions is 'sales commissions', which would fall under the category of 'sales and marketing expenses'.

Another possible expense category for commissions is 'cost of goods sold' (COGS). This would be the case if the commissions are paid to employees who are involved in the production or sale of goods. For example, if you are a manufacturer and you pay commissions to your sales staff, those commissions would be classified as COGS.

The final possible expense category for commissions is 'general and administrative expenses' (G&A). This would be the case if the commissions are paid to employees who are not involved in the production or sale of goods. For example, if you are a company that provides services and you pay commissions to your customer service staff, those commissions would be classified as G&A.

Which expense category is correct for your company will depend on the specifics of your business and how you classify your employees. If you are unsure, it is best to speak with your accountant or financial advisor to ensure that you are correctly categorizing your expenses.

The information provided in this article does not constitute legal or financial advice and is for general informational purposes only. Please check with an attorney or financial advisor to obtain advice with respect to the content of this article.

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