Question

As a new salesperson, Marc is working on commission. Even though he has yet to make his first sales call, he has already been paid $300. How would you categorize the $300 payment?

Answer 1

The $300 payment Marc received is a draw against commission, an advance on future sales commissions given to a new salesperson for income stability.

Step-by-step explanation:

As a new salesperson, Marc is working on commission, which commonly means he will earn money based on the sales he generates. However, the $300 payment he received before making any sales can be categorized as a draw against commission. This is an advance on the future commissions he may earn. Such a draw is often used to provide new salespeople with some income stability as they start their sales activities and build their client base. The payment will likely be offset against his future commissions until it is fully 'repaid'.