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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › provision for warranty- revenue
Dear Sir,
I want to ask about the difference in treatment in two cases
1. guarantee to replace all defects for free
2. guarantee to immediately refund the customer
for example, in 2012, $4000 revenues, 2500 cost of sales. 200 is likely to be returned in the next year.
please explain how revenue and provision should be recorded in two cases, thank you in advance
Is this a complete question? Is there a difference? From the (lack of) information given, my initial reaction is to say that a provision is appropriate in both scenaria
Where’s the question from?