Using the revenue approach of accounting for product guarantees and warranty obligations
A) the liability is measured at the estimated cost of meeting the obligation.
B) there is no effect on future income.
C) the liability is measured at the value of the services to be provided.
D) the liability is measured at the value of the services to be provided, but there is no effect on future income.

Question

Quizplus · Accepted Answer

The revenue approach measures the liability at the value of the services to be provided, reflecting the expected cost of fulfilling the warranty obligations.

Using the Revenue Approach of Accounting for Product Guarantees and Warranty