Most major airlines have frequent flyer programs that permit passengers to earn free tickets based on the
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Most major airlines have frequent flyer programs that permit passengers to earn free tickets based on the number of miles they have flown. A recent Southwest Airlines annual report contained the following note:
The phrase incremental cost refers to additional expense associated with an extra passenger taking the flight (e.g., the cost of a soft drink and a snack).
Required: 1. What cost measures other than incremental cost could Southwest use? 2. What account should Southwest debit when it accrues this liability?
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