Which of the Following Is the Incorrect Basis for Recognizing

question 70

Multiple Choice

Which of the following is the incorrect basis for recognizing the expense indicated?

• A) Sales commissions expense on the basis of relationship with sales.
• B) Administrative salaries expense recognized as incurred.
• C) Amortization expense on the basis of time.
• D) Cost of goods sold expense on a subjective or arbitrary basis.

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Definitions:

Simple Annual Interest

Interest calculated on the principal amount only, without compounding, over a one-year period.

Grow Amount

A term not widely recognized in finance; the closest concept might be "growth amount," which refers to the increase in value or size of an investment or financial metric over a period.

Simple Annual Interest

Interest calculated once per year on the principal amount only, not on previously earned interest.

Investment Earn

The return or profit made on an investment over a certain period, including interest, dividends, and capital gains.