Sally Is a Corporate Sales Representative for Computer City

question 32

Multiple Choice

Sally is a corporate sales representative for Computer City.Sally receives a monthly travel allowance from Computer City to cover her travel costs (transportation,food,lodging,entertainment,etc. ) .If Sally is not required to account to Computer City for the use of the travel advance
I.Sally will not have to show any aspect of the travel reimbursement or expenses incurred if she spends all of the reimbursement on valid travel expenses.
II.Sally will only have gross income to the extent her travel allowance exceeds her actual costs.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Beginning Inventory

Beginning inventory is the value of inventory on hand at the start of an accounting period, before any purchases or production have been added.

Goods Available

The total quantity of goods that a company has for sale, including both products on hand and those being produced.

Gross Profit Rate

A financial metric that calculates the percentage of sales revenue remaining after deducting the cost of goods sold.

Sales Returns

Refers to the process of products being returned by customers to the seller for a refund or exchange.