Which of the Following Accounting Principles Requires That Warranty Expense

question 102

Multiple Choice

Which of the following accounting principles requires that warranty expense must be estimated and recognized in the same period when 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:

Property, Plant, and Equipment

Long-term assets vital to business operations and not easily converted into cash, encompassing real estate, factories, machinery, and more.

Buildings

Assets classified in accounting as long-term or fixed assets, representing structures owned by a company for business use.

Return On Assets

A profitability ratio that measures how efficiently a company uses its assets to generate profit, calculated as net income divided by total assets.

Asset Turnover

A ratio that measures the efficiency of a company's use of its assets in generating sales revenue.