Companies are required to recognize warranty expense at the time of sale due to the matching principle.

Name: Companies are required to recognize warranty expense at the time of sale due to the matching principle.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The matching principle requires expenses to be recognized in the same period as the related revenue. Since warranties are related to the sale of a product, the expense should be recognized at the time of sale to match the revenue.

Companies Are Required to Recognize Warranty Expense at the Time