GMC sells cars and pays each salesperson a commission of $800 for each car sold. During the month of December, a salesperson, Tom, sold 3 new cars. GMC pays commissions on the 5th day of the month following the sale. Tom operates on the cash basis; the car dealer operates on the accrual basis. Which of the following statements is true?
A) Tom will recognize commission revenue earned in the amount of $2,400 in December.
B) GMC will recognize commission expense in the amount of $2,400 in December.
C) Tom will recognize commission expense in the amount of $2,400 in January.
D) Tom will recognize revenue in the same month that the car dealer recognizes expense.
B
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The transaction approach to determining income is a concept in which
a. income is measured as the amount that an entity could consume during a period and be as well off at the end of that period as it was at the beginning. b. the financial statement effects of business events are classified as revenues, gains, expenses, and losses, which are used to measure and define income. c. market values adjusted for the effects of inflation or deflation are used to calculate income. d. income equals the change in market value of the firm's outstanding common stock for the period.
The value chain only encompasses the retailer and the final consumer
Indicate whether the statement is true or false
_____ costs do not change as output is increased or decreased
a. Marginal b. Variable c. Fixed d. Total
What happens if the name of the indorsee or payee is misspelled in an indorsement?
A) The instrument becomes nonnegotiable. B) The instrument can be indorsed with the misspelled name. C) The instrument has to be remade to be valid. D) The instrument cannot be subsequently indorsed.