Which of the following principles requires that warranty expense be recorded in the period that revenue is recorded?
A)Consistency principle
B)Matching principle
C)Materiality concept
D)Profit recognition principle

Question

Quizplus · Accepted Answer

The matching principle requires that all expenses related to generating revenue must be recorded in the same period that the revenue is recognized. Since warranty expense is directly related to the sale of products and the revenue generated from those sales, it must be recorded in the same accounting period as the sale.

Which of the Following Principles Requires That Warranty Expense Be