Existing Claims Related to Product Warranties and Litigation as of December

question 56

Multiple Choice

Existing claims related to product warranties and litigation as of December 31, 2010, indicate that it is probable that a liability has been incurred.However, as of December 31, 2010, the exact amount of the obligation cannot be reasonably estimated, but a range of possible amounts has been determined.Based on these facts, an estimated loss contingency should be

• A)accrued
• B)disclosed but not accrued
• C)neither accrued nor disclosed
• D)classified as an appropriation of retained earnings

---

Definitions:

Self-actualization

The realization or fulfillment of one's talents and potentialities, considered as a drive or need present in everyone.

Self-efficacy

The belief in one's ability to succeed in specific situations or accomplish a task, which can play a significant role in how one approaches goals, tasks, and challenges.

Reciprocal Determinism

A concept in social psychology that suggests individual behavior, environment, and cognitive factors influence each other in a bidirectional fashion.

Id, Ego, Superego

Components of Sigmund Freud's psychoanalytic theory of personality, representing the unconscious, the reality-oriented aspect, and the moral conscience respectively.