Which of the Following Is a Contingency That Would Most

question 117

Multiple Choice

Which of the following is a contingency that would most likely require accrual?

• A)Potential losses from extended warranties.
• B)Customer premium offers.
• C)Potential liability on a product where none have yet been sold.
• D)Sales tax payable.

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Definitions:

Single-Entry Bookkeeping System

An accounting method in which each financial transaction is recorded only once in account books; similar to a checkbook register; the journal for each transaction is recorded in one column, or on a single line, to account for either a positive or negative amount to demonstrate the receipt or disbursement of cash.

Checkbook Register

A record of all deposits, withdrawals, checks, and transactions made through a checking account.

Cash Control Sheet

A financial document used to track the inflow and outflow of cash within a business to ensure accurate accounting and prevent fraud.

Pegboard System

An organizational tool consisting of a board with holes that can hold pegs or hooks for the purpose of hanging or displaying items.