Concerning Accounting for Warranties, Which of the Following Statements Is

question 102

Multiple Choice

Concerning accounting for warranties, which of the following statements is true?

• A) The expense warranty accrual method is the only method accepted for federal income tax purposes.
• B) The modified cash basis is the method used for for tax reporting.
• C) The sales warranty accrual method uses a percentage of completion approach to warranty revenue recognition.
• D) The modified cash basis recognizes warranty expense when cash is received on the sale.

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