The warranty liability account will be carried from year to year and will be increased by
A) current years repairs to non-warranty products.
B) current years estimated warranty expense.
C) prior years' estimated warranty expense.
D) current year's actual warranty expense.

Question

Quizplus · Accepted Answer

The warranty liability account is increased by the current year's estimated warranty expense, which represents the anticipated cost of fulfilling warranty obligations for products sold during the year.

The Warranty Liability Account Will Be Carried from Year to Year