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Is Warranty Expense recognized the same period that sale revenue is recognized because of the conservatism principle?
Wiki User
∙ 9y ago
No, that is the matching principle, which can be defined as:
The costs of doing business are recorded in the same period as the revenue they help to generate. Examples of such costs include the cost of goods sold, salaries and commissions earned, insurance premiums, supplies used, and estimates for potential warranty work on the merchandise sold. Consider the wholesaler who delivered five hundred CDs to a store in April. These CDs change from an asset (inventory) to an expense (cost of goods sold) when the revenue is recognized so that the profit from the sale can be determined.
Wiki User
∙ 9y ago
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What is the journal entry for warranty expense charged against the revenue?
Debit Warranty Expense Credit Warranty Liability
Is warranty expense a current or non-current asset?
An expense is not an asset at all.
What do you understand by the concept of conservatism . Why is it also called the concept of prudence. Why is it not applied as strongly today as it used to be in the Past?
"conservatism in the balance sheet is of dubious value if attained at the expense of conservatism in the income statement, which is far more significant." A branch of accounting that requires a high degree of verification before making a legal claim to any profit. Accounting conservatism will recognize all probable losses as they are discovered and most expenditures as they are incurred. Revenue will be deferred until it is verified. Having strict revenue-recognition criteria is one of the most common forms of accounting conservatism.
What is an expense that has not been paid and has not yet been recognized in the accounts by a routine entry?
accrued
When a bond is bought at a premium do you recognize income or expense?
You have a high probability of creating a principle loss.
What is the journal entry for warranty expense charged against the revenue?
Debit Warranty Expense Credit Warranty Liability
When do you record warranty expense?
When its returned within the warranty period.
What is the journal entry for a warranty purchased in financial accounting?
The journal entry to record the purchase of a warranty in financial accounting would be to debit the Warranty Expense or Warranty Cost account and credit the Unearned Warranty Revenue account. This reflects the cost of providing the warranty coverage and defers the recognition of revenue until the warranty services are actually provided.
Is warranty expense a current or non-current asset?
An expense is not an asset at all.
when an amount already recognized as revenue becomes uncollectible, it is recognized as an expense.?
No.
What is the accounting entry for sales return under warranty?
The accounting entry for sales return under warranty is the accrued warranty liability. This entry is written under warranty expense.
What are the disadvantages for conservatism?
Some disadvantages of conservatism include resistance to change, potential for inequality to persist or worsen, and a tendency to uphold traditional values at the expense of progress or inclusivity.
What do you understand by the concept of conservatism . Why is it also called the concept of prudence. Why is it not applied as strongly today as it used to be in the Past?
"conservatism in the balance sheet is of dubious value if attained at the expense of conservatism in the income statement, which is far more significant." A branch of accounting that requires a high degree of verification before making a legal claim to any profit. Accounting conservatism will recognize all probable losses as they are discovered and most expenditures as they are incurred. Revenue will be deferred until it is verified. Having strict revenue-recognition criteria is one of the most common forms of accounting conservatism.
Whish is more appropriate recognized sales as expense or loss?
Neither sales are income
What is an expense that has not been paid and has not yet been recognized in the accounts by a routine entry?
accrued
When a bond is bought at a premium do you recognize income or expense?
You have a high probability of creating a principle loss.
Where do you File warranties in bookeeping?
Companies must accrue estimated warranty expenses. The journal entry to accrue the expenses is a debit to warranty expense, and a credit to an accrued warranty liability account. When warranties are paid the debit is to the warranty liability account and the credit is to the cash or bank account.
