Q.State whether the following statement is True or False and give a reason: 'A straight commission plan gives a salesman a secure and steady income.'

This tests the key feature of the straight commission method — that pay depends entirely on sales made. …

Statement: 'A straight commission plan gives a salesman a secure and steady income.'

Answer: False.

Reason: Under a straight commission plan the salesman is paid only a commission — a percentage of the sales (or profit) he makes — and receives no fixed salary at all. His income therefore depends entirely on how much he sells: it rises when sales are high and falls when sales are low, and it may be very small in a slack season or when the salesman is new and has not yet built up sales. Because the income is uncertain and variable, the straight commission plan does NOT give a secure or steady income. A secure, steady income is the feature of the straight salary …

Do not simply write 'False' without a reason — such questions require the reason to earn full marks. Do not mix up …