A Company Sells a Particular Product Only in the Last

question 91

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.
• #10,000,000 x 98% = $9,800,000 Net Sales x 6% commission percentage = $588,000 estimated accrued commissions payable.

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Definitions:

Lateralization

The tendency for some neural functions or cognitive processes to be specialized to one side of the brain or the other.

Neurogenesis

The process of generating new neurons in the brain, which occurs in certain brain regions and plays a role in learning and memory.

Synaptogenesis

The formation of synapses between neurons in the nervous system, crucial for brain development, learning, and memory.

Hemispheric Dominance

A process in which one hemisphere becomes stronger and more adept than the other.