Warranty expense should be recorded in the period:
A) that the product sold is repaired or replaced
B) immediately following the period in which the product is sold
C) that the product is paid for by the customer
D) the product is sold

Question

Quizplus · Accepted Answer

Warranty expense should be recorded in the period the product is sold, according to the matching principle in accounting, which states that expenses should be recorded in the same period as the revenues they help to generate.

Warranty Expense Should Be Recorded in the Period