Accounting for Premiums and Coupons
UPDATE: When the granola bars are sold in the example given in this video, you would also debit Cost of Goods Sold and credit Inventory to reflect the fact that the bars are no longer in the Inventory.
This video explains how to account for premiums and coupons (mail-in rebates, cereal boxtops, labels, etc.) that are offered by firms as an incentive to purchase a product. An example is provided to illustrate the accruing of a liability for premiums and coupons along with the associated journal entries.
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UPDATE: When the granola bars are sold in the example given in this video, you would also debit Cost of Goods Sold and credit Inventory to reflect the fact that the bars are no longer in the Inventory.
This video explains how to account for premiums and coupons (mail-in rebates, cereal boxtops, labels, etc.) that are offered by firms as an incentive to purchase a product. An example is provided to illustrate the accruing of a liability for premiums and coupons along with the associated journal entries.
Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com
To like us on Facebook, visit https://www.facebook.com/Edspira
Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael’s life is to increase access to education so all people can achieve their dreams. To learn more about Michael’s story, visit http://www.MichaelMcLaughlin.com
To follow Michael on Facebook, visit
https://facebook.com/Prof.Michael.McLaughlin
To follow Michael on Twitter, visit
https://twitter.com/Prof_McLaughlin
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hi, thank you for the videos; they are very helpful.
quick question, what if the the inventory redeemed is bigger than what we estimated? (ex: 50% of toys are redeemed)
thanks 🙂
Great videos!!!! Your the best at explaining the concepts. Just one issue with the video, you seem to have missed the entry for the inventory and COGS when you sold the bars. You did it for the toys but we would need to make that COGS entry when those bars were sold also.
why are you awesome like that all the time? Thank you soooo much
GOOD EXPLANATION
thank you, your videos are very helpful!
Thank you very much!