Which of the Following Principles Requires That Warranty Expense Be

question 42

Multiple Choice

Which of the following principles requires that warranty expense be recorded in the period that revenue is recorded?

• A)Materiality concept
• B)Profit recognition principle
• C)Consistency principle
• D)Matching principle

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Definitions:

Dumping

The act of selling a product in a foreign market at a price below its cost of production or below the price in the home market, often considered unfair trade.

Commodity

A fundamental product utilized in trade that can be exchanged for others of its kind.

Tariffs and Quotas

Government-imposed trade restrictions; tariffs are taxes on imported goods, while quotas are limits on the quantity of goods that can be imported.

Quotas

Restrictions imposed by a government on the quantity of a good that can be imported or exported during a specific period.