Rita Is Appointed as an Agent for Superior Sales,Inc

question 12

Multiple Choice

Rita is appointed as an agent for Superior Sales,Inc.The agency agree?ment is silent as to the level of sales that Rita is expected to achieve.She must

• A)achieve nothing because the agreement says nothing on the issue.
• B)attain the level that Rita achieved with her previous employer.
• C)maintain the level Superior attained before Rita became an agent.
• D)use reasonable diligence and skill in selling.

---

Definitions:

Warranty Expense

This is an accounting term for the cost that a company anticipates or incurs due to the repair or replacement of products under warranty.

Sales Units

The quantity or number of products sold or services rendered by a business during a specific period.

Product Warranty Payable

A liability account that records the estimated amounts a company expects to pay for warranties on products it has sold.

Product Warranty Expense

Costs associated with the repair or replacement of faulty products that have been sold, under the terms of a product warranty.