On January 1, 2017, Fryer Company Enters into a Contract

question 80

Multiple Choice

On January 1, 2017, Fryer Company enters into a contract to supply 600 pastry frying machines to a regional donut retailer. The machines will be delivered at a rate of 25 machines per month over 2 years at a transaction price of $1,000 per machine. The salesperson received a $36,000 sales commission on the date the contract was signed. The journal entry to record the transaction on January 1 will include a

• A) debit Prepaid Sales Commissions for $36,000.
• B) debit Sales Commission Expense for $36,000.
• C) credit Sales Revenue $600,000.
• D) credit Sales Revenue $564,000.

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Definitions:

Oral Stage

In Freudian psychoanalytic theory, the first stage of psychosexual development, where the mouth is the primary source of gratification.

Infancy

The period in human development from birth to the age of two, characterized by rapid physical growth and cognitive development.

Fixated

A psychological term referring to an obsessive interest or focus on a particular object, activity, or stage of development.

Anal Stage

A phase in Freudian psychosexual development when a child finds pleasure in controlling bowel movements, typically occurring between 18 months and 3 years of age.