Which of the Following Items Below Is Recorded as an Estimate

question 63

Multiple Choice

Which of the following items below is recorded as an estimate when initially recognized?

• A)CPP payable
• B)Unearned revenue
• C)Warranty obligation
• D)Notes payable

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Definitions:

Variable Expenses

Costs that change in proportion to the level of production or sales activity.

Contribution Margin Ratio

A financial measure that gauges the proportion of sales revenue that exceeds variable costs, indicating how much revenue contributes towards covering fixed expenses and generating profit.

Variable Expenses

Costs that change in direct relation to changes in business activity levels, such as production or sales volume.

Fixed Expenses

Costs that do not vary with the level of production or sales, remaining constant over a specified period of time.