Question

In a recent annual report, Apple Computer reported the following in one of its disclosure notes: "Warranty Expense: The Company provides currently for the estimated cost for product warranties at the time the related revenue is recognized." This note exemplifies Apple's use of:

Answer 1

Answer:

the matching principle

Explanation:

Based on the information provided within the question it can be said that this note exemplifies Apple's use of the matching principle. This is a principle that states that expenses in finances should be recorded in the books during the period of time in which they are paid. Which is what Apple is exemplifying by saying that the cost for warranty is applied as soon as the revenue is recognized.