The Accounting for Warranty Cost Is Based on the Expense

question 36

Multiple Choice

The accounting for warranty cost is based on the expense recognition principle which requires that the estimated cost of honoring warranty contracts should be recognized as an expense

• A) when the product is brought in for repairs.
• B) in the period in which the product was sold.
• C) at the end of the warranty period.
• D) only if the repairs are expected to be made within one year.

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Definitions:

Motivation

The internal and external factors that stimulate desire and energy in people to be continually interested and committed to a job, role, or subject, or to make an effort to attain a goal.

Stressors

Events, situations, or stimuli from the external environment that cause stress or discomfort to an individual.

Goal Attainment

The process of achieving objectives set by an individual or within an organizational context.

Absenteeism

The habitual non-presence of an employee at their job, which can include both excused absences like sick leave and unexcused absences.