Warranties and income taxes are examples of expenses that must be estimated.

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Warranties and income taxes are both examples of expenses that require estimation because their actual costs may not be known until later or may vary based on various factors. For example, a company may need to estimate the cost of warranty repairs for products sold during a given period, based on past experience and other factors. Similarly, income taxes are often estimated in advance based on expected earnings and applicable tax rates.

Warranties and Income Taxes Are Examples of Expenses That Must