Information Available Prior to the Issuance of the Financial Statements

Multiple Choice

Information available prior to the issuance of the financial statements indicates that it is probable that, at the date of the financial statements, a company has a present obligation related to product warranties.The amount of the expense involved can be reasonably estimated.Based on the above facts, the estimated warranty expense should be

A) accrued.
B) disclosed but not accrued.
C) neither accrued nor disclosed.
D) classified as an appropriation of retained earnings.