From the following details what will be the partners commission? Net profit before charging partners commission 65,000. Partners commission @ 11% after charging such commission.
Correct answer: A. 6441
- A. 6441
- B. 5431
- C. 7654
- D. 9876
Explanation
When commission is calculated after charging commission, the base amount is 111% of the commission, so commission = 65,000 × 11/111 = approximately 6,441. The 11% is not applied directly to 65,000.
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Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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