Warranty costs are expensed at the time the item covered by the warranty is sold.

Name: Warranty costs are expensed at the time the item covered by the warranty is sold.
Brand: Quizplus
Rating: 4.8 (32 reviews)

Question

Quizplus · Accepted Answer

Warranty costs are recognized as an expense when the related revenue is recognized, which is at the time of sale, in accordance with the matching principle of accounting. This ensures that the costs associated with a sale are recorded in the same period as the revenue from that sale.

Warranty Costs Are Expensed at the Time the Item Covered