Solution-Which expenses originate from

Which expenses originate from

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Problem 1: Holten Farm sells new tractors and pays each salesperson a commission of $1,000 for each tractor sold. During the month of August, a salesperson, Fred, sold three new tractors. Holten Farm pays Fred on the 10th day of the month following the sale. Fred operates on the cash basis; Holten Farm operates on the accrual basis. Which of the following statements is true?

a. Fred will recognize commission expense in the amount of $3,000 in September.

b. Fred will recognize revenue in the same month that the tractor dealer recognizes expense.

c. Holten Farm will recognize commission expense in the amount of $3,000 in August.

d. Fred will recognize commission revenue earned in the amount of $3,000 in August

Problem 2: Expenses originate from

a. collecting cash from customers.

b. paying off liabilities.

c. using an asset or recognizing liabilities.

d. incurring liabilities or providing services to customers.

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Which expenses originate from

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