If sales are rupees two lakh and the deed allows partner commission at two percent on sales, what is the commission?

Correct answer: Rupees four thousand

The direct answer is option A: rupees four thousand. The commission is 2% of sales, and sales are ₹2,00,000. Convert the percentage into a fraction: 2% = 2/100. Now calculate: commission = 2/100 × 2,00,000 = ₹4,000. The base is sales, so we do not need the firm’s profit. Option A is correct because the calculation directly follows the deed. Option B, ₹2,000, would be 1% of ₹2,00,000, not 2%. Option C, ₹20,000, would represent 10% of sales, so it is too high. Option D, ₹40,000, would represent 20% of sales, also too high. A common mistake is to confuse a commission on sales with a commission on profit. Here the words “on sales” clearly identify the base. Another mistake is to forget that 2% means two parts out of one hundred. Memory cue: when commission is on sales, multiply sales by the stated percentage; do not search for profit.