Which of the Following Accounting Principles Requires That Warranty Expenses

question 12

Multiple Choice

Which of the following accounting principles requires that warranty expenses must be estimated and recognized in the same period as the related sales revenue is recognized?

• A)the matching principle
• B)the disclosure principle
• C)the revenue principle
• D)the consistency principle

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Definitions:

Forecasted Net Income

An estimate of a company's profit for a future period, calculated by projecting revenues and subtracting anticipated expenses.

Competitive Pricing

A pricing strategy where a product's price is set based on the prices of similar products offered by competing businesses in the market.

Industry Averages

Statistical metrics that represent the average performance or output within a particular industry.

Accounts Receivable

Debts that customers owe a business for delivered goods or services awaiting payment.