The accounting concept that requires recognition of a liability for customer premium offers is:
A)Periodicity.
B)Conservatism.
C)Historical cost.
D)The matching principle.

Question

Quizplus · Accepted Answer

The matching principle requires that expenses be recognized in the same period as the related revenues. In this case, the customer premium offers represent an expense that is incurred when the customer makes a purchase. Therefore, a liability for the premium offer must be recognized in the same period as the revenue from the sale.

The Accounting Concept That Requires Recognition of a Liability for Customer