Which Statement About Warranties Is Correct

question 31

Multiple Choice

Which statement about warranties is correct?

• A)Warranties are provisions.
• B)Warranties included with the product sold are accounted for under IAS18.
• C)Warranties are financial liabilities.
• D)Warranties included with the product sold are accounted for under IAS39.

---

Definitions:

Payment

A financial transaction where money is transferred in exchange for goods or services.

Future Date

A specified day in the future on which an event is planned or expected to occur.

Negotiable Instrument

A document that promises to pay a certain sum of money, which can be demanded at any time or on a fixed date, and allows the beneficiary to transfer this right to someone else.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for financing immediate needs.