Repair costs incurred in honoring warranty contracts should be debited to Warranty Liability.

Name: Repair costs incurred in honoring warranty contracts should be debited to Warranty Liability.
Brand: Quizplus
Rating: 4.9 (55 reviews)

Question

Quizplus · Accepted Answer

Repair costs incurred in honoring warranty contracts represent an expense under the warranty liability, which is the liability account that records the amount a company expects to pay for future warranty claims. Therefore, those costs should be debited to the warranty liability account.

Repair Costs Incurred in Honoring Warranty Contracts Should Be Debited