Bill Tall Trucks sells new trucks and pays each salesperson a commission of $1,000 for each...
- Bill Tall Trucks sells new trucks and pays each salesperson a commission of $1,000 for each truck sold. During the month of August 2012, a salesperson, Phil, sold 3 new trucks. Bill Tall pays Phil on the 10th day of the month following the sale. Phil operates on the cash basis; the car dealer operates on the accrual basis. Which of the following statements is true? ________
|
A) |
Phil will recognize revenue in the same month that the car dealer recognizes expense. |
|
B) |
Bill Tall will recognize commission expense in the amount of $3,000 in August. |
|
C) |
Phil will recognize commission revenue earned in the amount of $3,000 in August. |
|
D) |
Phil will recognize commission expense in the amount of $3,000 in September. |
Homework Answers
Answer
(B) is correct as Bill Tall will recognize commission expense in the amount of $3,000 in August.
because Bill Tall operates on Accrual basis.
Phill will recognise revenue when he will get money as commision on truck sales.
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Bill Tall Trucks sells new trucks and pays each
salesperson a commission of $1,000 for each...
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