When a Company Settles a Warranty Claim by Replacing the Defective

question 25

Multiple Choice

When a company settles a warranty claim by replacing the defective goods, the journal entry will include a debit to _______ and a credit to _______.

• A)Warranty Expense, Cash
• B)Warranty Expense, Inventory
• C)Estimated Warranty Payable, Cash
• D)Estimated Warranty Payable, Inventory

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Definitions:

File Number

An identifier assigned to a case, document, or record for tracking and organizational purposes.

Plaintiff

A party who initiates a lawsuit.

Client Confidentiality

The ethical and legal duty of professionals to protect and keep private all information related to their clients.

Performance Evaluation

A systematic and periodic process that assesses an individual's or entity's job performance and productivity in relation to certain predetermined criteria and organizational objectives.