Question

Canterbury Cycles sells Harleys and pays each salesperson a commission of $800 for each cycle sold. During the month of December, a salesperson sold 3 cycles. The company pays commissions on the 5th day of the month following the sale. Which of the following statements is true?a. The salesperson will recognize commission revenue earned in the amount of 2400 in Decemberb. The company will recognize commission expense in the amount of $2,400 in December.c. The salesperson will recognize commission expense in the amount of $2,400 in January.d. The salesperson will recognize revenue in the same month that the cycle dealer recognizes expense.

Answer 1

Answer:

b. The company will recognize commission expense in the amount of $2,400 in December.

Step-by-step explanation:

Based on the information given the statements that is true will be: THE COMPANY WILL RECOGNIZE COMMISSION EXPENSE IN THE AMOUNT OF $2,400 IN DECEMBER reason been that each salesperson were paid a commission in the amount of $800 for each cycle sold, which is 3 cycles during the month of December.

Calculation to determine the Commission Expense

Commission Expense=$800*3 cycles

Commission Expense=$2,400

Therefore The company will recognize commission expense in the amount of $2,400 in December.

Answer 2

Answer: The company will recognize commission expense in the amount of $2,400 in December

Step-by-step explanation:

Based on the information given in the question, the company will recognize commission expense in the amount of $2,400 in December.

A commission is regarded as a fee which is paid to a salesperson by a company in exchange for completing a sale.

It should be noted that in the accrual basis of accounting, commission should be recorded in the same period as when the sale generated was generated.