Clarion Inc.issues numerous discount coupons throughout the year.A balance in the Estimated Liability for Coupon Redemption account
A)indicates an error has been made in posting.
B)should equal the same amount of coupons redeemed.
C)is the amount of outstanding coupons it expects to be redeemed.
D)indicates that more coupons were redeemed than estimated.

Question

Quizplus · Accepted Answer

The Estimated Liability for Coupon Redemption account represents the amount of outstanding coupons that the company expects to be redeemed, meaning customers have received the coupons but have not yet utilized them. Thus, the balance in this account should equal the amount of coupons that the company estimates will be redeemed.