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 extension of a warranty on goods sold normally represents a legal obligation to the seller of the goods.
________ b)The entry to recognize the warranty obligation increases the Warranties Payable account and decreases a revenue account.
________ c)The entry to record the payment of cash to settle a warranty claim increases expenses (Warranties Expense)and decreases liabilities (Warranties Payable).
________ d)Net income is not affected by the entry to record the payment of cash to settle a warranty claim.
________ e)Total assets are not affected by the adjusting entry to record the warranty obligation.