Concerning Accounting for Warranties, Which of the Following Statements Is

question 52

Multiple Choice

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

• A) The expense warranty accrual method is not an acceptable method for federal income tax purposes.
• B) The modified cash basis is the most conceptually sound method for financial reporting.
• C) The sales warranty accrual method recognizes warranty expense in the period of sale.
• D) The modified cash basis recognizes warranty expense when cash is paid for the repairs to merchandise under warranty.

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Definitions:

Final Days

The term "final days" refers to the last days of an individual's life or the concluding phase of a particular event or period.

Comfortable

Providing a state of physical or psychological ease and freedom from pain or constraint.

Grief and Bereavement

Emotional and psychological responses to loss, particularly the death of a loved one, involving stages of mourning and adjustment.

Consequences

The results or effects that naturally follow from a specific action or set of conditions.