A Company Sells a Particular Product Only in the Last

question 55

Multiple Choice

A company sells a particular product only in the last month of its fiscal year. The company uses commission agents for such sales and pays them 6% of their net sales 30 days after the sales are made. The agents' sales were $10 million. Experience indicates that 10% of the sales are usually not collected and 2% are returned in the first month of the new year. The auditor would expect the year-end balance in the accrued commissions payable account to be:

• A)$528,000.
• B)$540,000.
• C)$588,000.
• D)$600,000.

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Definitions:

1790s

A decade marked by the early stages of the French Revolution and significant developments in the political landscape of the United States.

America

Often referring to the United States, a country in North America consisting of 50 states and characterized by its diverse populace and significant global influence.

Washington's Presidency

The period from 1789 to 1797 when George Washington served as the first President of the United States, setting many precedents for the role.

Lifelong Position

A job or office that is held for the incumbent's lifetime, often seen in judicial appointments or certain academic posts.