If warranty obligations are material,they must be accrued when products are sold because the obligation arises then,not when the actual repair services are performed.

Question

Quizplus · Accepted Answer

Material warranty obligations must be accrued when products are sold because the obligation arises at the time of sale, not when the repair services are actually performed. The accrual should be based on management's best estimate of the expected warranty costs.

If Warranty Obligations Are Material,they Must Be Accrued When Products