A firm is required to estimate a liability for repairs for products sold with a warranty. If the firm's accountants later find that the estimated amount for repairs has been overstated, the correct accounting procedure is to
a. make an adjusting entry to reduce the amount of estimate.
b. make a correcting entry because the overstatement is an error.
c. show the amount of overstatement on the income statement as a loss.
d. do nothing for the year in question and modify the next year's estimate.
d
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Answer the following statement true (T) or false (F)
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What will be an ideal response?