Estimating and recording product warranty expense in the period of the sale best follows which of the following accounting concepts?
A) cost concept
B) business entity concept
C) matching concept
D) materiality concept

Question

Quizplus · Accepted Answer

The matching concept requires that expenses incurred to generate revenue in a period should be recognized in the same period. Estimating and recording product warranty expense in the period of sale is an example of the application of the matching concept because it matches the warranty expense with the related revenue in that period.

Estimating and Recording Product Warranty Expense in the Period of the Sale