Which of the Following Best Describes the Accounting for Assurance-Type

question 89

Multiple Choice

Which of the following best describes the accounting for assurance-type warranty costs?

• A)expensed when paid
• B)expensed when obligations are probable and estimable
• C)expensed based on estimate in year of sale
• D)expensed when warranty claims are certain

---

Definitions:

Marginal Utility

The additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service.

Total Utility

The total satisfaction received by consuming a certain amount of goods or services.

Marginal Utility

The additional satisfaction or utility gained from consuming one more unit of a good or service.

Total Utility

The overall satisfaction or benefit a person receives from consuming a particular quantity of goods or services.