CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

Warranty is recorded as ______.

A. a prepaid expense when the sale is made
B. an actual expense on the income statement when repairs are made
C. an estimated expense on the income statement when the sale is made
Correct Answer: C

A liability is probable and should be recognized and expensed during the period of sales if it can be reasonably estimated.

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