A Company Estimates That Warranty Expense Will Be 4% of Sales

question 166

Multiple Choice

A company estimates that warranty expense will be 4% of sales. The company's sales for the current period are $185,000. The current period's entry to record the warranty expense is:

• A) Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400
• B) Debit Warranty Expense $7,400; credit Sales $7,400.
• C) Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400.
• D) Debit Estimated Warranty Liability $7,400; credit Cash $7,400.
• E) No entry is recorded until the items are returned for warranty repairs.

---

Definitions:

Meta Sigma Complex

A term that is not commonly defined in the field of chemistry, indicating a potential misunderstanding or mislabeling of a concept. NO.

Phenyl Substituent

A functional group consisting of a benzene ring directly attached to the core structure of a molecule, influencing its chemical behavior.

Aromatic Ring

A cyclic (ring-shaped) group of atoms that exhibits stability due to the delocalization of pi electrons across all the ring atoms, common in many organic compounds.

O,p-director

Groups in aromatic chemistry that direct electrophilic substitution reactions to the ortho and para positions.