Existing Claims Related to Product Warranties and Litigation as of December

question 12

Multiple Choice

Existing claims related to product warranties and litigation as of December 31, 2016, indicate that it is probable that a liability has been incurred. However, as of December 31, 2016, the amount of the obligation cannot be reasonably estimated. 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.

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Definitions:

Jumping

A physical activity that involves propelling oneself off the ground using the muscles in the legs and feet.

Binocular Vision

The ability to maintain visual focus on an object with both eyes, creating a single three-dimensional image and depth perception.

Gross Motor Skills

The abilities required to control the large muscles of the body for walking, running, sitting, crawling, and other activities.

Head Motions

Movements of the head, which can include nodding, turning, or tilting, often used as a form of nonverbal communication or to express emotion.