Use of the Accrual Method in Accounting for Product Warranty

question 19

Multiple Choice

Use of the accrual method in accounting for product warranty costs

• A) is required for federal income tax purposes.
• B) is frequently justified on the basis of expediency when warranty costs are immaterial.
• C) finds the expense account being charged when the seller performs in compliance with the warranty.
• D) represents accepted practice and should be used whenever the warranty is an integral and inseparable part of the sale.