Eckstein Company Sells Television Sets with a Two Year Service $\quad \$ 2,000$

question 17

Multiple Choice

Eckstein Company sells television sets with a two year service warranty. Each television sells for $400. In September, Eckstein sold 50 television sets and estimates that during the warranty period Eckstein will provide an average of $40 of service costs per television set. The journal entry that Eckstein Company should record to recognize the estimated service warranty expense for September is

• A)
• Estimated liability for service \( \quad \$ 2,000 \)
• Wages payable \( \$ 2,000 \)
• B)
• \(\begin{array}{lr}
• \text { Service warranty expense } & \$ 2,000 \\
• \text { Wages payable } & \$ 2,000
• \end{array}\)
• C)
• \(\begin{array}{ccc}
• \text { Estimated liability for }\\
• \text { warranty service } & \$ 2,000 & \\
• \text { Service warranty expense } & & \$ 2,000
• \end{array}\)
• D)
• \(\begin{array}{lr}
• \text { Service warranty expense } & \$ 2,000 \\
• \text { Estimated liability for } \\
• \text { warranty service }& \$ 2,000 \\
• \end{array}\)

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Definitions:

Population Parameter

A numerical value that represents a characteristic or feature of an entire population.

Confidence Coefficient

The probability that a confidence interval contains the true population parameter, typically expressed as a percentage.

Margin Of Error

An estimate of the amount of random sampling error in a survey's results, expressing the range within which the true value is expected to lie with a certain level of confidence.

Sample Size

The number of observations or units included in a sample from a population, critical for the reliability of statistical analyses.