Question
8] A manufacturer provides warranties at the time of sale to purchasers of its product lines. Under the terms of the warranty, the manufacturer
8] A manufacturer provides warranties at the time of sale to purchasers of its product lines. Under the terms of the warranty, the manufacturer undertakes to repair or replace items that fail to perform satisfactorily within a period of two years from the date of sale.] When should the manufacturer recognize the provision? Select which one of the following is correct. A] At the time of sale. B] At the end of the warranty period. C] When the company is notified of a claim. D] Never. A provision should not be recognized; rather the costs associated with the warranty should be expensed as incurred.
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