Question

Which of the following statements related to recording warranty expense is false?A. Recording estimated warranty expense complies with the full disclosure principle.B. Warranty expense should be recorded in the period when the warranty service is performed.C. Recording estimated warranty expense complies with the matching principle.D. The seller reports a warranty obligation as a liability.E. Warranty costs are probable and the amount can be estimated.

Answer 1

Based on the warranty recording standards, and the available option, the false statement about the recording warranty expense is Warranty expense should be recorded in the period when the warranty service is performed.

What is Warranty Expense?

Warranty Expense is a term that is used to describe the cost that a business expects to or has already incurred for the improvement or replacement of goods that it has sold.

Generally, the term warranty expenses record the total amount of warranty expense limited by the warranty period that a business typically allows.

Features of Warranty Expenses are the following:

• It complies with the full disclosure principle.
• It complies with the matching principle.
• It helps the seller to report a warranty obligation as a liability.
• It is generally considered probable and the amount can be estimated.

Hence, in this case, it is concluded that the correct answer is option B. Warranty expense should be recorded in the period when the warranty service is performed.

Learn more about Warranty expenses here: https://brainly.com/question/28175235

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