Table of contents

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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

Given the following pay methods, which would result in the highest earnings for one month on net sales of $73,620?A. 5% commission on net salesB. $2,500 monthly salary plus 2% commission on net salesC. $4,000 monthly salary with no commissionD. $1,000 monthly salary plus 4% commission on net sales

5% commission on net sales

$4,000 monthly salary with no commission

$1,000 monthly salary plus 4% commission on net sales

$2,500 monthly salary plus 2% commission on net sales

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Verified step by step guidance

Step 1: Calculate the earnings for option A (5% commission on net sales). Use the formula: Earnings = Commission Rate × Net Sales. In MathML:

Earnings = 0.05 × 73620

Step 2: Calculate the earnings for option B ($2,500 monthly salary plus 2% commission on net sales). Use the formula: Earnings = Monthly Salary + (Commission Rate × Net Sales). In MathML:

Earnings = 2500 + (0.02 × 73620)

Step 3: Calculate the earnings for option C ($4,000 monthly salary with no commission). Since there is no commission, the earnings are simply the monthly salary. In MathML:

Earnings = 4000

Step 4: Calculate the earnings for option D ($1,000 monthly salary plus 4% commission on net sales). Use the formula: Earnings = Monthly Salary + (Commission Rate × Net Sales). In MathML:

Earnings = 1000 + (0.04 × 73620)

Step 5: Compare the calculated earnings from all four options (A, B, C, and D) to determine which one results in the highest earnings. The option with the highest value is the correct answer.