Indicate Whether Each of the Following Statements Is True or False

Question

Examlex · Accepted Answer

The Answer is a) True b) True c) False d) True e) True
Explanation: a) This is true. Offering a warranty creates a legal obligation on the part of the seller.
b) This is true. The adjusting entry increases warranties payable, a liability, and warranties expense.
c) This is false. The entry to record warranty repairs usually decreases cash (or could increase an account such as wages payable or decrease inventory) and decreases warranties payable.
d) This is true. The entry to record warranty work does not affect revenues or expenses, and thus is does not affect net income.
e) This is true. The end-of-period entry is a claims exchange transaction that increases liabilities (warranties payable) and increases warranties expense, which reduces equity.

Indicate Whether Each of the Following Statements Is True or False

Short Answer

Correct Answer:
Verified

Indicate Whether Each of the Following Statements Is True or False

Short Answer

Correct Answer:VerifiedShow Answer

Correct Answer:
Verified