An Electronics Store Is Running a Promotion Where for Every

question 84

Multiple Choice

An electronics store is running a promotion where for every video game purchased, the customer receives a coupon upon checkout to purchase a second game at a 50% discount. The coupons expire in one year. The store normally recognized a gross profit margin of 40% of the selling price on video games. How would the store account for a purchase using the discount coupon?

• A) The reduction in sales price attributed to the coupon is recognized as premium expense.
• B) The difference between the cost of the video game and the cash received is recognized as premium expense.
• C) Premium expense is not recognized.
• D) The difference between the cost of the video game and the selling price prior to the coupon is recognized as premium expense.

---

Definitions:

Antigens

Foreign substances that induce an immune response in the body, especially the production of antibodies.

Antibodies

Proteins produced by the immune system to identify and neutralize foreign objects like bacteria and viruses.

White Blood Cells

Cells of the immune system involved in defending the body against both infectious disease and foreign materials.

Heart Attack

A medical emergency characterized by the death of heart muscle due to the loss of blood supply, commonly caused by a blockage in one or more of the coronary arteries.