Question

Which of the following is true regarding an agent?

• The revenue recorded by the agent is the sales price of the product

• The revenue recorded by the agent is set by the agent, without input from the principal

• The agent has a performance obligation to provide the goods and services in all circumstances

• The agent’s revenue is equal to the commission it is entitled to receive on each transaction

Answer 1

The correct answer is

The agent’s revenue is equal to the commission it is entitled to receive on each transaction

Explaination

as agent is an intermediatery between the buyer and the seller and he charges the commission from the persons, for execution of the transaction and charges commission for it. That commission is the revenue of the agent and not the whole sale value of the transaction is the revenue of the agent. So the correct answer is

The agent’s revenue is equal to the commission it is entitled to receive on each transaction