how-is-the-estimated-warranty-payable-method-similar-to-the-allowance-for-doubtf

Question

How is the estimated warranty payable method similar to the allowance for doubtful accounts?

Accepted Answer

Both involve estimating future expenses based on past data and recording them in the current period.

Answer

Both are methods to increase revenue recognition.

Answer

Both require actual expenses to be recorded only when they occur.

Answer

Both are recorded as assets on the balance sheet.