Murray Company warrants its products against defects for two years from date of sale. During the current year, the company made sales of \(\$ 1,000,000\). Management estimated warranty costs on those sales would total \(\$ 50,000\) over the two-year warranty period. Ultimately, the company paid \(\$ 35,000\) cash on warranties. What is the company's warranty expense for the year? What accounting principle or objective governs this answer?