The estimation of warranty costs is required by which accounting concept or principle?
A)Revenue recognition
B)Matching principle
C)Reliability
D)Cost-benefit

Question

Quizplus · Accepted Answer

The estimation of warranty costs is required by the matching principle, which requires that expenses (such as warranty costs) be recognized in the same period as the related revenue is recognized. By estimating and accruing warranty costs in the period of sale, the matching principle is followed.

The Estimation of Warranty Costs Is Required by Which Accounting