A Quality-Assurance Warranty Typically Results in the Seller

question 8

Multiple Choice

A quality-assurance warranty typically results in the seller:

• A) Accruing an expense for anticipated warranty costs at the time the warrantied product is sold.
• B) Recognizing an asset for accrued warranty costs which is amortized over the life of the warranty.
• C) Recognizing revenue over the life of the extended warranty.
• D) Refunding warranty payments upon expiration of the warranty.