Question

The current (commonly used) accounting treatment for premiums and coupons requires that the costs should be...

The current (commonly used) accounting treatment for premiums and coupons requires that the costs should

be recorded at the maximum possible redemption cost in the year of the related sales.

be recorded at the total estimated redemption cost in the year of the related sales.

be recorded in the year(s) that the redemption is expected to occur.

not be recorded at all.

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Answer #1

The Current (commonly used ) accounting treatment for premiums and coupans requirs that the costs should

Answer :

be recorded at the total estimated redemption cost in the year of the related sales.

Wrong Option

be recorded at the maximum possible redemption cost in the year of the related sales. It is wrong option. Becuase it is recorded at estimated redemption cost not at maximum possible redemption cost.

be recorded in the years that the redemption is expected to occur. It is again wrong option. Because it has to be recorded in the related sales year not in the year of redemption expected to occur.

not be recorded at all.It Is again wrong option because it has to be recorded in the related sales year at estimated redemption cost.

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