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When a Company Settles a Warranty Claim by Replacing the Defective

Question 59

Multiple Choice

When a company settles a warranty claim by replacing the defective goods, the journal entry will include a debit to _______ and a credit to _______.


A) Warranty Expense, Cash
B) Warranty Expense, Inventory
C) Estimated Warranty Payable, Cash
D) Estimated Warranty Payable, Inventory

Correct Answer:

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