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

Commission is when you make money based on the percentage of _____.

net sales

gross profit

net income

operating expenses

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Verified step by step guidance

Understand the concept of commission: Commission is a form of compensation where an individual earns money based on a percentage of a specific financial metric, typically tied to sales performance.

Identify the financial metric that commission is most commonly based on. In most cases, commission is calculated as a percentage of net sales, which represents the total revenue generated from sales minus any returns, allowances, or discounts.

Review the other options provided: Gross profit refers to revenue minus the cost of goods sold, net income is the overall profit after all expenses, and operating expenses are costs incurred during business operations. None of these are typically used as the basis for commission calculations.

Confirm that net sales is the correct answer because it directly reflects the revenue generated from sales activities, which is the most relevant metric for calculating commission.

Ensure clarity by understanding that commission incentivizes sales performance, making net sales the logical choice for its calculation.