According to the matching principle, warranty expense must always be recorded in the same period as the related revenue.

Question

Quizplus · Accepted Answer

This statement is true. The matching principle requires that expenses be recorded in the same period as the related revenue they generate. In the case of a warranty, the expense should be recognized in the same period as the sale of the product, as the warranty is part of the cost of goods sold.

According to the Matching Principle, Warranty Expense Must Always Be