Concerning Accounting for Warranties, Which of the Following Statements Is

question 92

Multiple Choice

Concerning accounting for warranties, which of the following statements is true?

• A)The expense warranty accrual method is the only method accepted for federal income tax purposes.
• B)The modified cash basis is the most often used method for financial reporting.
• C)The sales warranty accrual method uses a percentage of completion approach to warranty revenue recognition.
• D)The modified cash basis recognizes warranty expense when cash is received on the sale.

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Definitions:

Decremental

Characterized by a gradual decrease in size, strength, or value over time.

Incidental

Occurring alongside or as a minor accompaniment to something else, not central or primary.

Need for Achievement

A psychological drive that fosters the pursuit of accomplishing difficult tasks and meeting high standards of success.

NAch

N-Acetylcholine, a neurotransmitter involved in the activation of muscle action, learning, and memory.