Consolidate Warranty For Free

If the defective product needs to be repaired or refunded, the cost incurred reduces the liability account. Warranty expense is recognized in the same period as revenue for the sold products if there is a probability that an expense will be incurred and if the company can estimate the amount of the expense.

A warranty expense refers to the cost that a company anticipates incurring for the replacement or repair of products customers purchase. Companies account for warranty expenses only during the established warranty period. After the warranty period expires, companies cease to incur the warranty expense.

A typical warranty clause often covers defective work, materials and equipment, but excludes defects caused by abuse, alterations to the work, improper or insufficient maintenance, improper operation, or normal wear and tear.

Warranty Period means the period of validity of the warranties given by the Supplier commencing at completion of procurement of goods or a part thereof, if separate completion of the procurement of goods for such part has been provided in the Contract, during which the Supplier is responsible for defects with respect ...

There are many examples of warranties depending on the type of product a consumer is buying. Some examples may include replacing a product such as a mobile phone if it does not the way it is advertised. A consumer may also receive free repair services where a product has been damaged during use.

The Basic Concepts: A warranty is a legally binding commitment forming part of the sales contract which assures the buyer that the product or service is free from defects. A warranty often provides for a specific remedy such as repair or replacement in the event the article or service fails to meet the warranty.

Whereas a warranty is included with the purchase of a vehicle and goes into effect at the time of purchase, service contracts must be added on at an extra cost and can be purchased at any time.

The two main types are express and implied warranties. An express warranty is one that is clearly stated (or "expressed") either verbally or in writing, while an implied warranty automatically covers most consumer goods valued over a certain amount, but only provides a base level of protection for consumers.