PRC-1 · Chapter 4 · Question 38 of 100
'Crescent Retail' pays a 3% commission to its sales team in the month immediately following the sale. If total sales for December were Rs. 1,500,000, what is the accrued commission liability at 31 December?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Rs. 45,000
Explanation
The commission is an expense incurred in December because the sales happened in December. It remains unpaid until January, creating an accrual of Rs. 1,500,000 x 3% = Rs. 45,000.
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