Booker Company Reported Sales Revenue for 2013 of $800,000

question 80

Multiple Choice

Booker Company reported sales revenue for 2013 of $800,000.The products were sold with a six-month warranty.Members of Booker's management estimate the cost of the warranty will be equal to 3% of sales revenue.Which of the following is included in the entry to record the actual amounts paid out as a result of warranty claims?

• A) A debit to Estimated warranty payable for the actual amount of payments
• B) A credit to Estimated warranty payable for $24,000
• C) A debit to Estimated warranty payable for $24,000
• D) A debit to Warranty expense for the actual amount of payments

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Definitions:

Public Water

Water resources, such as rivers, lakes, and reservoirs, that are managed by governmental entities and accessible to the general public.

Annual Statement

A comprehensive report detailing a company's financial performance over the year, typically required by regulatory bodies.

Contaminants

Any substance or agent that makes something impure or harmful, often found in the environment, food, or water.

CERCLA

Comprehensive Environmental Response, Compensation, and Liability Act; a federal law designed to clean up sites contaminated with hazardous substances.