Which of the following accounting principles requires that warranty expenses must be estimated and recognized in the same period when the related sales revenue is recognized?
A)the matching principle
B)the disclosure principle
C)the revenue principle
D)the consistency principle

Question

Quizplus · Accepted Answer

The matching principle requires that expenses must be recognized in the same period as the related revenue. Warranty expenses are an example of such expenses, and are recognized in the same period when the related sales revenue is recognized. This is because the expense is directly related to the sales revenue, and should be recognized in the same period to reflect the proper matching of revenues and expenses.

Which of the Following Accounting Principles Requires That Warranty Expenses