In which of the following periods should the estimated warranty liability be debited?
A)The period when the product is sold
B)The period when the product is shipped to the customer
C)The period when cash is collected for the sale of the product
D)The period when cash is paid to repair or replace the product

Question

Quizplus · Accepted Answer

The estimated warranty liability should be debited in the period when cash is paid to repair or replace the product, as this is when the liability is settled.

In Which of the Following Periods Should the Estimated Warranty