A Company trades in home appliances in Sohar. The Company is facing a claim for OMR. 50,000 from a customer, in respect of an electric circuit worn out in a refrigerator sold by company. The claim will succeed in accordance with legal opinion. The company has the option and ability to re- claim 60% of the amount from wholesaler who supplied the circuit-breakers which broke down. How should the company report this in Statement of financial position? O a. OMR. 50,000 as a liability and OMR. 30,000 as asset. O b. OMR. 30,000 as a liability. O.OMR. 30,000 as a Provision. O d. OMR. 50,000 as Provision and OMR. 30,000 as asset.

A Company trades in home appliances in Sohar. The Company is facing a claim for OMR. 50,000 from a customer, in respect of an electric circuit worn out in a refrigerator sold by company. The claim will succeed in accordance with legal opinion. The company has the option and ability to re- claim 60% of the amount from wholesaler who supplied the circuit-breakers which broke down. How should the company report this in Statement of financial position? O a. OMR. 50,000 as a liability and OMR. 30,000 as asset. O b. OMR. 30,000 as a liability. O.OMR. 30,000 as a Provision. O d. OMR. 50,000 as Provision and OMR. 30,000 as asset.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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