Which of the Following Statements Is True of Drawing Accounts

question 69

Multiple Choice

Which of the following statements is True of drawing accounts?

• A) It is used to provide a steadier income for salespeople who work on commission.
• B) It is used to motivate employees who receive a straight salary.
• C) It is used to attract salespeople who are willing to sell low-margin items.
• D) It is used to provide an additional income for full-time sales people.
• E) It is used to pay employees for delivering good customer service.

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Definitions:

Stock

Represents a share in the ownership of a company and entitles its holder to a claim on part of the company's assets and earnings.

Call Option

A fiscal arrangement allowing the buyer to purchase an asset at an agreed-upon price within a certain period, without the requirement to proceed with the purchase.

Call Premium

The amount by which the price of a call option exceeds its intrinsic value, often reflecting the time value of the option.

Put Option

An agreement in finance allowing the owner to sell a certain quantity of an underlying asset at a set price during a specific period, without being compelled to do so.