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today our discussion will be about basic accounting for warranty payable or warranty liability but before we proceed to the accounting for warranty payable let us first define what warranty is warranty is a warranty refers to the terms and situations in which repairs or exchanges will be made in the event that the product does not function as originally described or intended meaning ito puyo manga repairs um made by the seller if in case there were this if the sold product particularly appliances in most common cases does not function as it was originally described or intended warranty warranty is a liability okay so how are we going to recognize warranty liability okay there are two approaches on how are we going to recognize the warranty liability we have the accrual approach and expense as a concord approach so to apply the basic accounting for warranty liability i prepare a very simple okay um problem or illustration so for today let me read to you my else my illustrative example
