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 company should:
A. Recognize warranty liability when the company purchases the bicycles.
B. Consider the warranty expense a contingent liability.
C. Recognize warranty expense at the time the warranty work is performed.
D. Consider the warranty expense a remote liability since the rate is only 2%.
E. Recognize warranty expense and liability in the year of the sale.
Answer: E
You might also like to view...
______ plans should be discussed at the ending meeting so it is clear whether and how the change agent may be further involved with the client’s organization.
a. Contract extension b. Subsequent consultation c. Postconsultation transition d. Ending maintenance
Increasingly, inside salespersons manage ___________________ and outside salespersons are more _______________.
A. new-business sales; focused on current customers B. relationships; focused on providing support C. digital approaches to sales; relationship oriented D. team selling; face-to-face oriented E. end-use consumer sales; focused on selling to retailers
Craven, a minor, sold her exercise bicycle to Franklin, an adult, who resold it to Lavin, a good faith purchaser. Lavin's title to the bicycle is
a. voidable. b. valid. c. void. d. unenforceable.
Explain the basic concept of bond duration and why this measure is meaningful to investors
What will be an ideal response?