How do you account for financial losses in order to maintain
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How do you account for financial losses in order to maintain quality customer service, for example, a restaurant that gives a free meal to an upset customer or a company that gives repeat customers a discount? From the viewpoint of a management accountant, how would this cost be classified and how would it figure into a company's financial statements?
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How do you account for financial losses in order to maintain quality customer service, for example, a restaurant that gives a free meal to an upset customer or a company that gives repeat customers a discount? From the viewpoint of a management accountant, how would this cost be classified and how would it figure into a company's financial statements?How do you account for financial losses in order to maintain quality customer service, for example, a restaurant that gives a free meal to an upset customer or a company that gives repeat customers a discount? From the viewpoint of a management accountant, how would this cost be classified and how would it figure into a company's financial statements?
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A restaurant that gives a free meal to an upset customer or companies that offer discounts to customers are doing so out of goodwill. They are giving away the service or product to retain the customer and their loyalty, which builds a better business relationship. According to the IRS, goods and/or services provided for goodwill are not allowable as legitimate expenses.
From a financial accounting standpoint, the value of the services and/or goods would not go onto ...
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