The Modified Cash Basis to Determine Warranty Expense

question 13

Multiple Choice

The modified cash basis to determine warranty expense

• A)violates the matching concept
• B)requires recognition in the period of sale of the estimated warranty expense and warranty liability
• C)separates accounting for two components of the sales price: the price of the product and the price of the warranty
• D)records warranty expense when the merchandise under warranty is sold

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Definitions:

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