Which One of the Following Items Is Not a Liability

question 48

Multiple Choice

Which one of the following items is not a liability?

• A) Accrued estimated warranty costs
• B) Dividends payable in shares
• C) Advances from customers on contracts
• D) The portion of long-term debt due within one year

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Definitions:

Merchantability

Refers to the guarantee that a product sold meets reasonable expectations of quality and usability for its intended purpose.

Implied Warranties

Legal guarantees that ensure a product meets certain minimum standards of quality and functionality, even if not expressly stated.

Implied Warranties

Legal guarantees automatically granted to a purchaser by law, ensuring that a product meets certain minimum quality standards.

Course of Performance

The conduct between parties to a contract that indicates what they consider acceptable performance under the contract's terms.