Indicate Whether Each of the Following Statements Is True or False

Short Answer

Indicate whether each of the following statements is true or false.
_____ a)The amount of warranty expense is an estimate that is based on the amount of merchandise sold.
_____ b)A warranty obligation only occurs if a buyer purchases an extended warranty.
_____ c)When a warranty claim is made,the seller's equity decreases.
_____ d)When a warranty claim is settled,the seller's liabilities increase.
_____ e)Product warranties usually represent legal liabilities that must be reported in the financial statements.