Concerning Accounting for Warranties, Which of the Following Statements Is

Multiple Choice

Concerning accounting for warranties, which of the following statements is false?

A) The expense warranty accrual method is not an acceptable method for federal income tax purposes.
B) The modified cash basis is the most conceptually sound method for financial reporting.
C) The sales warranty accrual method uses a cost recovery approach to warranty revenue recognition.
D) The modified cash basis recognizes warranty expense when cash is paid for the repairs to merchandise under warranty.