Which of the following is included in the entry to record warranty expense?
A) A debit to Warranty expense
B) A credit to Inventory
C) A credit to Warranty expense
D) A debit to Estimated warranty payable

Question

Quizplus · Accepted Answer

To record warranty expense, a company would debit Warranty Expense and credit Estimated Warranty Payable. Option B is incorrect because there shouldn't be any credit to inventory when recording warranty expense. Option C is incorrect because there shouldn't be any credit to warranty expense when recording warranty expense. Option D is incorrect because normally the Estimated Warranty Payable is only affected at the end of the accounting period when a company adjusts the warranty reserve.

Which of the Following Is Included in the Entry to Record