Accounting for costs of incentive programs for frequent customer purchases involves:
A)Recording an expense and a liability each period.
B)Recording a liability and a reduction of revenue each period.
C)Recording an expense and an asset reduction each period.
D)Recording an expense and revenue each period.

Question

Quizplus · Accepted Answer

Incentive programs for frequent customer purchases typically involve recognizing an expense for the cost of the incentives and a liability for the future obligation to provide the incentives.

Accounting for Costs of Incentive Programs for Frequent Customer Purchases