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After Japonica and DeShawn returned home from a vacation in California, Japonica noticed that her new luggage had a five-inch tear in it. Rather than assume that the damaged luggage was a cost of flying and there was nothing to be done about it, she called the airline's customer service center. The person answering the phone at the center mailed her the instructions for getting her suitcase repaired at the airline's expense. Japonica and DeShawn were pleased with the repair when the suitcase was shipped home about a month later. In this scenario, Japonica and DeShawn played the role of:
Estimated Bonuses
Anticipated bonus payments to employees based on performance criteria that have not yet been paid out.
Bonus Payable
A liability account on the balance sheet that represents the amount of bonuses a company owes to its employees but has not yet paid.
Warranty Expense
refers to the cost that a company expects to incur to repair, replace, or compensate for goods or services that are under warranty, recognized as a liability and expense in the financial statements.
Defective Parts
Components of a product that fail to meet quality standards or are damaged, requiring repair or replacement.
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