Are all warranty costs accounted for under the accrual basis of accounting? explain.

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Business

Kaylee Swanson

22 June, 01:39

Are all warranty costs accounted for under the accrual basis of accounting? explain.

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Cooper Knox · Answer 1

All warranty costs accounted for under the accrual basis of accounting go under this section unless the repair cost does not have reasonable estimation. If the repair cost does not have reasonable estimation, it goes under the cash basis for accounting. The accrual basis method of accounting is when you record transactions for revenue when earned and expenses as they are incurred.