The cost of promotional offers should be recorded as expenses in the accounting period when the offers are redeemed by customers.

Question

Quizplus · Accepted Answer

The cost of promotional offers should be recorded as expenses in the accounting period when the offers are made, not when they are redeemed, according to the matching principle in accounting. This principle dictates that expenses should be recognized in the same period as the revenues they help to generate.

The Cost of Promotional Offers Should Be Recorded as Expenses