The estimated warranty obligation at the end of the financial year is best described as aA. Uncertain liabilityOB. Contingent liabilityO C. LiabilityO D. Constructive liabilityOE. Unrecognized liability

A contingent liability is a liability that may occur in future depending upon outcome of a future…

The estimated warranty obligation at the end of the financial year is best described as a OA. Uncertain liability B. Contingent liability OC. Liability O D. Constructive liability OE. Unrecognized liability

The estimated warranty obligation at the end of the financial year is best described as a OA. Uncertain liability B. Contingent liability OC. Liability O D. Constructive liability OE. Unrecognized liability

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: A present obligation that is probable and for which the amount can be reliably estimated should…

A: The estimated expenses are the expenses which can be valued on the basis of past experiences or…

Q: Demonstrate revenue recognition for long-term contracts, both at a point intime when the contract is…

A: Long term contracts usually qualify for revenue recognition over time. We recognise revenue over…

Q: Match (by letter) the correct reporting method for each of the items listed below. Reporting Method…

A: Current liability : Current liabilities are those liability which are due within a year. Long term…

Q: b.bond payable c.two-year note payable

A: Current liabilities are a company's short-term financial commitments due within a year or during a…

Q: Which of the following is most likely to be reported as an accrued liability? Multiple Choice…

A: Accrued liability is a sort of obligation of an entity that the entity has not paid yet. In other…

Q: Which of the following is not an accrued liability? Question 36 options: A) Warranty…

A: Accrued liabilities are costs that a business has incurred but not yet paid for and recorded in the…

Q: Define current liabilities and list the typical liability categories included in this…

A: Current liability: Current liability is a debt that the companies need to pay the debts from…

Q: When a liability is paid, which account should be credited? A, Cash B.Accounts payable

A: Cash (money or coins) is legal tender that may be used to exchange products, debts, or services. It…

Q: expense warranty accrual method

A: Warranty expense accrual method recognizes warranty expense if it is probable and can be estimated…

Q: Describe the obligations of long term liabilities.

A: Long-term liabilities: Long-term liabilities are obligations that the company needs to pay after at…

Q: Which of the following is an account used in applying the Sales Warranty Approach, but not the…

A: The Sales Warranty Approach is an accounting method used to account for warranties that a company…

Q: Which of the following is most likely to be classified and reported as current liability? a. Bond…

A: The liabilities that are payable within one year are classified as current liabilities. It includes…

Q: Partial satisfaction of a multiple performance obligation is reported on the balance sheet asa.…

A: Performance obligation: A performance obligation is a promise made by a seller to transfer the goods…

Q: If an insured fails to pay the premium when due, the insured's heallh policy will remain in force…

A: Health insurance is a type of insurance that helps to pays for medical costs incurred as a result of…

Question

The estimated warranty obligation at the end of the financial year is best described as a
A. Uncertain liability
OB. Contingent liability
O C. Liability
O D. Constructive liability
OE. Unrecognized liability

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Answer to the question

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Can you please describe contingent liabilities and how to account for and/or report them.
Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weeklyexpense of a coffee stand is $1,200 and the variable cost per cup of coffee served is $0.22.Required:1. Fill in the following table with your estimates of total costs and cost per cup of coffee at the indicatedlevels of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest tenth of a cent.Cups of Coffee Served in a Week2,000 2,100 2,200Fixed cost ........................................................ ? ? ?Variable cost ................................................... ? ? ?Total costs ....................................................... ? ? ?Average cost per cup of coffee served ........... ? ? ?2. Does the average cost per cup of coffee served increase, decrease, or remain the same as the numberof cups of coffee served in a week increases? Explain.
What differentiates a current liability from a long-term liability? Share at least two examples of each. What are the differences in accounting for these two types of liabilities?
How is the interest earned on the principal amount calculated at the end of each interest period?
assume that we report the reinsurance company amount of recoverable claims 35000, expected amount 28000, assume that also the balance of recoverable provision for outstanding claims a-28000 b-25000 c- 30000 what is the adjusting entry
Distinguish between a current liability and a long-termdebt.
Unamortized debt premium should be reported on the balance sheet of the insurer as a Group of answer choices direct addition to the face amount of the debt deduction from the issue costs deferred credit direct addition to the present value of the debt
Which of the following is most likely to be classified and reported as a current liability? a. Prepaid Expense b. Bond Payable c. Mortgage Payable d. Unearned Revenue O None of the above
Which of the following is correct about contingent liabilities and provisions? The terms are interchangeable. A provision is based on an estimate while a contingent liability can be estimated reliably. A provision is disclosed in the statement of financial position while a contingent liability is disclosed in the notes. A contingent liability does not need to be disclosed in an entity's annual report.
S1: The straight-line method computes the unearned premiums, policy by policy, on a pro-rata basis in respect of the unexpired periods of the respective insurance policies at the end of each period. S2: PFRS 17 exempts an insurer temporarily from some requirements of other PFRS in selecting accounting policies for insurance contract for liability adequacy test. S3: Insurers shall disclose the following information that identifies and explains the amounts in its financial statements arising from insurance contract which includes its accounting policies for insurance contract and related assets, liabilities, income and expenses. a. Only S3 is incorrectb. All statements are correctc. Only S2 is correctd. Only S3 is correcte. Only S1 is incorrectf. Only S2 is incorrectg. All statements are incorrecth. Only S1 is correct
Problem 8: Distinguish between an actual liability and a contingent liability. Give an example of 3 different types of contingent liabilities and how they may exist in a company.
An encumbrance represents the estimated future liabilities for goods or services resulting from placing a purchase order or signing a contract. a. True b. False