The Commission Method of Payment

question 277

Multiple Choice

The commission method of payment:

• A) includes some salary and some commission.
• B) offers the most security for the salesperson.
• C) offers the most incentive for the salesperson.
• D) is tied to results projected in the sales plan.
• E) increases the amount of sales supervision needed.

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Definitions:

Cumulative Preferred Stock

A type of preferred stock that entitles the shareholder to receive dividends that were missed in the past before any dividends are paid to common stock shareholders.

Capital Stock

The total amount of shares that a corporation is authorized to issue as stated in its articles of incorporation.

Dividend

A portion of a company's earnings distributed to its shareholders.

Cumulative Preferred Stock

A type of preferred stock where dividends accumulate if not paid, and must be paid out before dividends to common stockholders.