The accounting principle that requires a company to record warranty expense in the same period that it records sales revenue is the:
A)going concern principle.
B)expense recognition principle.
C)conservatism principle.
D)consistency principle.

Question

Quizplus · Accepted Answer

The expense recognition principle requires that expenses should be recognized in the same period as the revenues they helped to generate. Therefore, a company should record the estimated warranty expense at the time of sale since it was incurred to support the sales revenue of the same period.

The Accounting Principle That Requires a Company to Record Warranty