Homework Answers
ANSWER. D. THE COMPANY OFFERS A TWO YEAR WARRANTY AND THE EXPENSE CAN BE REASONABLY ESTIMATED
THE CONTINGENT LIABILITY THAT IS PROBABLE AND CAN BE REASONABLY ESTIMATED SHOULD BE ACCRUED. IF THE LOSS IS REASONABLY POSSIBLE THEN THAT SHOULD BE DISCLOSED AND NOT ACCRUED. ALSO CONTINGENT GAIN SHOULD NOT BE RECOGNISED.
IN CURRENT SCENARIO, TW YEAR WARRANTY CLEARLY SHOWS THE LOSS IS PROBABLE AND IT CAN BE REASONABLY ESTIMATED, SO THE AMOUNT SHOULD BE ACCRUED.
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