In which of the following periods should the expense for warranty costs be recorded?
A)The period when cash is paid to repair or replace the product
B)The period when cash is collected for the sale of the product
C)The period when the product is repaired or replaced
D)The period when the product is sold

Question

Quizplus · Accepted Answer

Warranty costs should be recorded in the period when the product is sold because they are considered an estimate of future costs related to the sale, aligning with the matching principle in accounting.

In Which of the Following Periods Should the Expense for Warranty