decreases -warranty service is considered separate deliverable, unearned revenue Warranties: promise made by a seller to a buyer to correct product issues Expense approach illustrated July -Dec. 31, 2011(Record sale in full) Cash/AR 500,000 Sales 500,000 July-Dec. 31, 2011 (actual warranty costs incurred) Warranty Expense 4000 Cash/Inventory/payroll 4000 Dec. 31, 2011 (accrue outstanding warranty obligations, 20,000 – 4000 already incurred) Warranty Expense…
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