Saran Digital Inc

question 34

Multiple Choice

Saran Digital Inc.starts the year with $2,500 in its Estimated Warranty Payable account.During the year,there were $210,000 of sales and $4,500 of warranty repair payments.Saran Digital estimates warranty expense at 2% of sales.At the end of the year,what is the balance in the Estimated Warranty Payable account?

• A)$4,200 debit
• B)$4,500 credit
• C)$2,500 debit
• D)$2,200 credit

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Definitions:

Positive Statement

A factual claim about how the world actually works, verifiable by observation or experience.

Production Possibilities Frontier

An illustration representing the peak production capabilities for two different items, utilizing a specific combination of resources and factors.

Opportunity Cost

The burden of not opting for the immediate subsequent best possibility when making a selection.

Slope

A measure of the steepness or incline of a line, often calculated as the ratio of the vertical change to the horizontal change between two points on the line.