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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

General Motors Corporation reported $2.6 billion of product warranties in the current liabilities section of a recent balance sheet. How would costs of repairing a defective product be recorded?

To determine

Warranty: It is an agreement made by the company to provide guarantee against the defects in the products.

To record: Cost of repairing a defective product

Explanation

  • Product warranty payable is a liability and it is decreased. So, debit it by $XXX...

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