A Major Airline Issues Frequent Flyer Credits That Allow the Passenger

question 25

Essay

A major airline issues frequent flyer credits that allow the passenger to receive credit toward future flights. For every ticket sold the customer receives a credit which, when 40 are collected, can be exchanged for a free ticket. During the year, the airline company recorded revenues of $60 million, which represented 100,000 tickets. The airline did not recognize the flyer credits on its income statement or its balance sheet. In the context of contingent liabilities, comment on the airline's accounting procedures.

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Definitions:

Ethnic Minorities

Ethnic minorities are groups within a population that have different national or cultural traditions from the majority population.

Value Conflicts

Situations where two or more values that are held dear come into conflict, resulting in a dilemma.

Western Providers

Health care professionals or services originating from or based in Western countries, often contrasted with traditional or alternative medicine practitioners from non-Western contexts.

Collectivism

The principle of prioritizing the needs and goals of the group over the individual.