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:

Corporation

A legal entity recognized by law as separate from its owners, with its own rights, privileges, and liabilities.

Limited Partnership

A form of partnership consisting of one or more general partners who have full liability and one or more limited partners whose liability is limited to the amount of their investment.

Limited Liability Company

An enterprise framework combining the corporation's limited liability safeguard with the tax efficiency found in partnerships or sole proprietorships.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another when entrusted with care of their assets or interests.