After the warranty liability has been established, the costs in the future will be recorded with a debit to Warranty Expense.

Question

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After the warranty liability has been established, future costs are recorded by debiting the Warranty Liability account and crediting Cash or Inventory, not by debiting Warranty Expense again. The Warranty Expense account is initially used to estimate and record the expected warranty costs at the time of sale.

After the Warranty Liability Has Been Established, the Costs in the Future