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A company sold $12,000 worth of bicycles with an extended warranty. The company's experience is...

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Accounting

A company sold $12,000 worth of bicycles with an extended warranty. The company's experience is that warranty expense averages 2% of sales. The company should:

A.) Recognize warranty expense and liability in the year of the sale

B.) Recognize warranty expense at the time the warranty work is performed

C.)Consider the warranty expense a remote liability since the rate is only 2%

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