Fact Pattern 25-1B (Questions B4-B6 Apply)

question 11

Multiple Choice

Fact Pattern 25-1B (Questions B4-B6 apply)
Margo works as an administrator and receptionist in Neon's Garage Door Store.Neon withholds federal taxes from Margo's pay,and controls the methods and details of the performance of her work.Margo is not au?thorized to modify the prices or other terms of a sale at the store.Omar installs Neon's Garage Door products at the buyers' locations.
-Refer to Fact Pattern 25-1B.Neon authorizes Omar to sell garage door upgrades and accessories at the buyers' locations at prices that Omar negotiates with those buyers.With respect to sales at those locations,Omar is

• A)an independent contractor.
• B)Neon's employee only.
• C)Neon's employee and agent.
• D)Neon's principal.

---

Definitions:

Revenue

The aggregate revenue from selling goods or services, which constitute a firm's central business functions.

Expense Accounts

Accounts used to record the consumption of assets or services that result in a decrease in owner's equity, excluding the withdrawal of business assets by the owner.

Income Summary Account

A temporary accounting ledger that aggregates all income and expenses over a period to calculate net profit or loss.

Adjusting Entries

Bookkeeping entries recorded at the conclusion of an accounting cycle to apportion earnings and outlays to the appropriate period.