Fees Earned by a Business in Exchange for Services Provided

question 74

Multiple Choice

Fees earned by a business in exchange for services provided by the business appear on which of the following statements?

• A) Balance sheet
• B) Income statement
• C) Statement of changes in equity
• D) Statement of cash flows
• E) Statement of financial position

---

Definitions:

Product Warranty Payable

A liability account that represents the amount a company expects to pay to repair or replace products under warranty.

Matching Concept

A fundamental accounting principle that requires expenses to be recorded in the same period as the revenues they help generate.

Product Warranty Expense

The cost associated with repairing or replacing products under warranty, recognized by companies to cover future warranty claims.

Warranty Repairs

Services offered for free by a manufacturer or seller to correct defects or malfunctions within a certain period after purchase.