Accounting for costs of incentive programs for customer purchases:
A)Requires probability estimation.
B)Follows the matching principle.
C)Is a loss contingency situation.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

All of the above are correct.Accounting for costs of incentive programs for customer purchases requires probability estimation to determine the amount of the liability, follows the matching principle to expense the costs in the period in which the revenue is recognized, and is a loss contingency situation because the obligation is not certain.

Accounting for Costs of Incentive Programs for Customer Purchases