Which of the following statements is INCORRECT concerning warranties?
A)Using the expense approach, the warranty is provided with the product or service with no
Additional fee.
B)Where warranty costs are immaterial or when the warranty period is quite short, the
Warranty costs may be accounted for using the cash basis.
C)Using the revenue approach, the warranty is a separate deliverable from the related
Product or service.
D)The revenue approach must be used for income tax purposes.

Question

Quizplus · Accepted Answer

The revenue approach is not a requirement for income tax purposes; it is an accounting method used to recognize revenue separately for warranties.

Which of the Following Statements Is INCORRECT Concerning Warranties