A Warranty Is an Example of A(n)

question 37

Multiple Choice

A warranty is an example of a(n) :

• A)contingent liability.
• B)known liability.
• C)estimated liability.
• D)settled liability.

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Definitions:

Monthly Compounded

A method of calculating interest where the interest is added to the principal each month, resulting in interest earned on interest.

Nominal Rate

The stated interest rate of a bond or loan, not adjusted for inflation.

Compounded Annually

A method in which interest is calculated once per year and added to the total sum, affecting the principal for the next period.

Promissory Note

A promissory note is a financial instrument that contains a written promise by one party to pay another party a determinate sum of money either on demand or at a specified future date.