When does warranty cost appear on the statement of cash flows?
A) When there is a settlement of a warranty claim made by a customer.
B) When the warranty obligation is recognized.
C) When merchandise is sold.
D) None of these.

Question

Quizplus · Accepted Answer

Warranty costs appear on the statement of cash flows when there is an actual cash outflow, such as when a warranty claim is settled and payment is made to the customer.

When Does Warranty Cost Appear on the Statement of Cash