If a company offers a warranty on the products it sells, the company records the warranty expense at the time that the warranty service is provided to customers under the terms of the warranty.

Question

Quizplus · Accepted Answer

The company records the estimated warranty expense at the time of sale, as part of the cost of goods sold. The actual warranty expenses are incurred later when the warranty service is provided to customers.

If a Company Offers a Warranty on the Products It