PRC-1 · Chapter 4 · Question 67 of 100
A company pays its salespeople a commission of 1% on sales, payable in the month immediately following the sale. Sales from January to November were Rs. 3,780,000, and December sales were Rs. 360,000. What is the accrued commission liability at the end of December?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Rs. 3,600
Explanation
Only the December commission remains unpaid at the end of December because previous months' commissions were paid in the following months. Rs. 360,000 x 1% = Rs. 3,600.
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