Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

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Multiple Choice

If your base salary is \$20,000 per year and you receive a 5\% commission on net sales, what would your total annual earnings be if your net sales for the year are \$100,000?

\$24,000

\$20,500

\$30,000

\$25,000

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Verified step by step guidance

Step 1: Start by identifying the components of the total annual earnings. The total earnings consist of the base salary and the commission earned from net sales.

Step 2: Calculate the commission by multiplying the net sales amount by the commission rate. Use the formula: Commission = Net Sales × Commission Rate. In this case, the net sales are $100,000 and the commission rate is 5%.

Step 3: Convert the commission rate percentage into a decimal for calculation purposes. For example, 5% becomes 0.05.

Step 4: Add the calculated commission to the base salary to determine the total annual earnings. Use the formula: Total Earnings = Base Salary + Commission.

Step 5: Verify the calculation by ensuring that the components (base salary and commission) are correctly added together to arrive at the total annual earnings.