question 8 0.5 points canterbury cycles sells harleys and pays each salesperson a commission of $800 for…

question 8 0.5 points canterbury cycles sells harleys and pays each salesperson a commission of $800 for each cycle sold. during the month of december, a salesperson sold three 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 revenue in the same month that the cycle dealer recognizes expense. b the salesperson will recognize commission revenue earned in the amount of $2,400 in december. c the company will recognize commission expense in the amount of $2,400 in december. d the salesperson will recognize commission expense in the amount of $2,400 in january.

question 8 0.5 points canterbury cycles sells harleys and pays each salesperson a commission of $800 for each cycle sold. during the month of december, a salesperson sold three 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 revenue in the same month that the cycle dealer recognizes expense. b the salesperson will recognize commission revenue earned in the amount of $2,400 in december. c the company will recognize commission expense in the amount of $2,400 in december. d the salesperson will recognize commission expense in the amount of $2,400 in january.

Answer

Brief Explanations:

  1. Revenue recognition for the sales - person: According to the revenue - recognition principle, revenue is recognized when it is earned. The salesperson sells three cycles in December at a $800 commission per cycle, so the commission revenue earned is $800×3 = $2,400 in December.
  2. Expense recognition for the company: The company pays commissions on the 5th day of the month following the sale. So, the company will recognize the commission expense in January, not December.
  3. The salesperson has no commission expense; they earn commission revenue.

Answer:

B. The salesperson will recognize commission revenue earned in the amount of $2,400 in December.