The account "Warranty Liability":
A)is adjusted at the end of the year.
B)is closed at the end of the year.
C)has a year-end credit balance equal to the cost of warranty repairs made during the year.

Question

Quizplus · Accepted Answer

The warranty liability account needs to be adjusted at the end of the year to reflect the actual warranty repairs made during the year. This adjustment ensures that the balance in the account accurately reflects the company's obligations for future warranty repairs. The account is not closed at the end of the year since it represents a continuing liability for the company. The year-end balance of the warranty liability account will typically be a credit balance equal to the estimated or actual cost of warranty repairs made during the year.

The Account "Warranty Liability