Question

Question 2 (1 point) Warranty liabilities are estimated based on actual warranty costs incurred to date True False Question 3 (1 point) Sales taxes which are combined in the sales price are required to have a journal entry recording the tax separately from the sale. True False Question 4 (1 point) The accounting for warranty costs is based on the concept of matching expenses with revenues, which requires that the estimated cost of honouring warranty contracts should be recognized as an expense when the product is brought in for repairs. in the period in which the product was sold. at the end of the warranty period. only if the repairs are expected to be made within one year.

Answer 1

2	Warranty liabilities are estimated based on actual warranty costs incurred till date.
	FALSE
	It is based on the estimated cost that will be incurred in future based of previous experince.
3	Sales tax are recorded separately from sales.
	TRUE
	It is recorded as a payable as it’s a liability to be paid to the government.
4	Warraty costs shold be recorgnised as an expense:
	In the period in which the product was sold.