Information available prior to the issuance of the financial statements indicates that it is probable that, at the date of the financial statements, a company has a present obligation related to product warranties.The amount of the expense involved can be reasonably estimated.Based on the above facts, the estimated warranty expense should be

Question

Quizplus · Accepted Answer

The estimated warranty expense should be accrued because it is probable and can be reasonably estimated, which meets the criteria for accrual under accounting standards.

Information Available Prior to the Issuance of the Financial Statements