Use the Information Below to Answer the Following Questions:
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question 39

Multiple Choice

Use the information below to answer the following questions:
On 30 June 2012, Video Manufactures Ltd, which uses accrual accounting, estimates that it will incur warranty costs of $24 000 in the next financial year on products sold during the year just ended. On 7 October 2012, the manufacturer pays $3500 under the warranty.
-What is the journal entry made by Video Manufactures Ltd on 30 June 2012?

• A) DR Warranty liability\(\quad\)\(\quad\)\(\quad\)CR Cash
• B) DR Warranty liability\(\quad\)\(\quad\)\(\quad\)CR Warranty expense
• C) DR Warranty expense\(\quad\)\(\quad\)\(\quad\)CR Warranty liability
• D) DR Warranty liability\(\quad\)\(\quad\)\(\quad\)CR Cash.

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Definitions:

Conservation

Piaget’s term for awareness that two objects that are equal according to a certain measure remain equal in the face of perceptual alteration so long as nothing has been added to or taken away from either object.

Symbolic Function

The ability to use symbols or abstract signs to represent something beyond direct experience.

Mental Representations

Internal images, ideas, or thoughts that stand in for objects, events, or relations in the outside world, aiding in cognition and perception.

Abstractly

Thinking in a way that is not concrete, focusing on ideas and concepts rather than physical or practical realities.