Which of the following best describes the accounting for assurance-type warranty costs?
A)expensed when paid
B)expensed when obligations are probable and estimable
C)expensed based on estimate in year of sale
D)expensed when warranty claims are certain

Question

Quizplus · Accepted Answer

Under GAAP, assurance-type warranty costs are expensed when the obligations are probable and estimable. This means that the costs are recognized in the same period as the revenue from the sale of the product, based on an estimate of the expected costs of fulfilling the obligations.

Which of the Following Best Describes the Accounting for Assurance-Type