Which of the Following Statements About Commission Systems of Compensation

question 117

Multiple Choice

Which of the following statements about commission systems of compensation is false?

• A)They increase the risk to workers because sometimes output declines for reasons not connected to the worker's effort.
• B)During sluggish periods, an employer's payroll expenses will decline along with sales.
• C)If workers are paid on the basis of the number of units produced, they may become less concerned about quality.
• D)The lack of income stability will induce the more productive workers to leave in search of more secure employment.

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Definitions:

Perpetual Inventory System

An approach to inventory management where inventory levels are updated in real-time following each sale or purchase.

Sales Return

Goods returned by the customer to the seller after the sale, leading to a reversal of revenue recorded.

Collection

Collection involves the process of gathering or receiving payments, funds, or necessary documents, especially in the context of business receivables or debts.

Perpetual Inventory System

Inventory accounting method where transactions are instantly recorded via computerized point-of-sale systems and enterprise asset management software.