During the first year of operations, a company granted warranties on its products.The estimated cost of the product warranty liability at the end of the year is $12,750.The product warranty expense of $12,750 should be recorded in the year the related product sale is made.

Question

Quizplus · Accepted Answer

The product warranty expense should be recorded in the year the related product sale is made. Therefore, the estimated cost of the product warranty liability at the end of the year should be recorded as an expense in the same year.

During the First Year of Operations, a Company Granted Warranties