All Things Digital Company Starts the Year with a Credit

question 70

Multiple Choice

All Things Digital Company starts the year with a credit balance of $3500 in its Estimated Warranty Payable account.During the year,there were $224,000 in sales and $4800 in warranty repair payments.All Things 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) $4480 debit
• B) $4800 credit
• C) $3500 debit
• D) $3180 credit

---

Definitions:

Endorphins

Neurochemicals produced in the brain that act as natural painkillers and also boost feelings of pleasure or well-being.

Pain-Controlling Chemicals

Biological substances produced by the body, such as endorphins, that help to naturally relieve pain.

Neurons

Special cells found in the nervous system that are designed to transfer information to other nerve cells, muscles, or glandular cells.

Inhibitory Neurotransmitter

Chemical substances released by neurons in the brain to decrease the activity of other neurons, thus reducing excitability and preventing overstimulation.