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In this session, the main focus is on guarantee and warranty costs. Warranty is a promise made by a seller to a buyer to ensure the product's performance, quality, or quantity. It provides assurance to buyers that the product will work as expected. Guarantee and warranty costs are important as they become part of the matching principle in accounting. Retailers or manufacturers offer warranties to encourage buyers to make purchases. Matching principle ensures that costs are matched with revenues in the same accounting period.