How much does the company issued the coupons record

Assignment Help Accounting Basics

Reference no: EM131763084

Question: The Sunday papers often contain coupon supplements. Each gives the consumer the ability to purchase an item for less (usually from $.20 to $1.00) than the store's usual price. Why not take one of those supplements, cut out a stack of coupons, and hand them out in class. Everyone should be interested in saving money!

· Read the fine print. What is the company promising? Is this a recorded liability or a disclosure in the footnotes? Explain.

· If a liability is recorded, how much does the company that issued the coupons record? Is it the total of all the coupons they printed? Some percentage of the total? How do they calculate that percent?

· Whose revenue is reduced-the store that redeems the coupon or the company that makes the product?

· If the manufacturer takes the reduction, does redeeming the coupon cost the store anything? How do you think the store accounts for coupons?

· Someone who has impatiently waited in line to buy bread and milk behind another customer who has presented the clerk with 30 coupons might well grumble that coupons are more trouble to everyone than they are worth. Are they? What is their value to the manufacturer? To the store? To the customer? Are they worth it?

Reference no: EM131763084

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