Each accounting period,Harris Company Department Store charges a bookkeeping account for its estimated shoplifting losses.The method that Harris Company Department Store uses to fund its retained shoplifting losses is a(n)
A)private insurance policy.
B)captive insurer.
C)credit line.
D)unfunded reserve.

Question

Quizplus · Accepted Answer

Harris Company Department Store uses an unfunded reserve method to fund its retained shoplifting losses. This means that they set aside a portion of their earnings to cover any shoplifting losses that occur, rather than relying on an external insurance policy or credit line. Charging a bookkeeping account for estimated losses helps to build up this reserve over time.

Each Accounting Period,Harris Company Department Store Charges a Bookkeeping Account