Which Statement About Warranties Is Correct

question 2

Multiple Choice

Which statement about warranties is correct?

• A)Warranties are provisions.
• B)Warranties included with the product sold are accounted for under IFSR15.
• C)Warranties are financial liabilities.
• D)Warranties included with the product sold are accounted for under IAS39.

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Definitions:

Financial Ratios

Financial ratios are quantifiable measures used to evaluate a company's financial performance by comparing two line items from financial statements.

Industry

A category of businesses that produce or sell similar products, services, or are involved in the same level of economic activity.

Operating Activities

Business actions directly involved in the production and delivery of goods and services, as reflected in the cash flow statement.

Current Accounts

A type of demand deposit account that allows withdrawals and deposits, typically used by businesses for their frequent money transactions.