Intermediate Accounting Final Exam Questions and answers with Complete Solutions

Accounting for costs of incentive programs for frequent customer purchases involves - Recording an expense and a liability each period The accounting concept that requires recognition of a liability for customer premium offer is - The matching principle When a material gain contingency is probable and the amount of the gain can be reasonably estimated, the gain should be - disclosed, but not recognized in the income statement The main difference between accounting for a rebate and a cash discount coupon is: - The expense for the latter is usually deferred until redemption of the coupon Accounting for cost of incentive programs for customer purchase: - All of the above are correct. A company should accrue a loss contingency only if the likelihood that a liability has been incurred is: - Probable and the amount of the loss can be reasonably estimated Gain contingencies usually are recognized in a company's income statement when - Realized