Under the expense approach, the warranty liability is measured using
A) the estimated future cost of servicing the product warranty.
B) actual costs of past years' repairs.
C) the estimated sales of past years.
D) the estimated past returns of products.

Question

Quizplus · Accepted Answer

The expense approach measures warranty liability based on the estimated future cost of servicing the product warranty, reflecting the expected costs to fulfill warranty obligations.

Under the Expense Approach, the Warranty Liability Is Measured Using