A company sold $12,000 worth of bicycles with an extended warranty. The company's experience is that warranty expense averages 2% of sales. The current period's entry to record the warranty expense is:
A. Debit Warranty Expense $240; credit Estimated Warranty Liability $240.
B. Debit Estimated Warranty Liability $240; credit Cash $240.
C. Debit Sales Allowances $240; credit Estimated Warranty Liability $240.
D. Debit Warranty Expense $240; credit Cash $240.
E. Debit Prepaid Warranties $240; credit Warranty Expense $240.
Answer: A
You might also like to view...
Sales transactions should be documented at initiation in order to accomplish which of the following objectives?
a. To provide the customer a copy of the transaction. b. To provide evidence of authorization and recording. c. To offer credit to customers. d. To generate back orders.
The impact of diversity on groups is caused by:
a. individual differences that affect how people perform. b. expectations people have about how others will perform. c. group processes that require cooperation among people with different values and beliefs. d. all of the above are true.
________ is an allowance for the consumption of capital
Fill in the blanks with correct word
Producers commonly provide discounts off list prices to intermediaries.
Answer the following statement true (T) or false (F)