What changes have taken place with respect to accounting rules ...

[jCorn1234]

What changes have taken place with respect to accounting rules related to sales promotions and why are they significant?

Question 2

Samples are often used to infer something about a population rather than canvassing the population itself because they are typically
 a. cheaper than complete counts.
  b. faster than complete counts.
  c. more accurate than complete counts.
  d. Both a and b are correct.
  e. a, b, and c are correct.

[nothere]

Answer to Question 1

Promotion expenditures historically were treated in exactly the same fashion as advertising expenditures, namely, as current expenses that were deducted from top-line revenue. However, new accounting rules require that those sales promotions used as a form of price discount, including promotions directed to retailers as well as to consumers, must now be treated as reductions in sales revenue. The difference between the old and new procedures is the amount recorded for the top-line revenue, and this change better reflects true levels of sales revenue. The old accounting system served to inflate actual revenue and to mislead financial analysts, stockholders, and other parties regarding a firm's actual revenue generation. Moreover, sales forces compensated on the basis of top-line results were overcompensated because revenue itself was overstated.

Answer to Question 2

e

[jCorn1234]

Correct answers!

[nothere]

Great! Please up vote