If Product X Cost $50 and Had a 4 Percent $\begin{array}{llr} \text { Product Warranty Expense} &2,000\\ \text { Estimated Product Warranty Liability} &&2,000\\\end{array}$

question 185

Multiple Choice

If product X cost $50 and had a 4 percent failure rate,the entry to record the estimated product warranty expense in a month when 1,000 units are sold would be

• A)
• \(\begin{array}{llr}
• \text { Product Warranty Expense} &2,000\\
• \text { Estimated Product Warranty Liability} &&2,000\\
• \end{array}\)
• B)
• \(\begin{array}{llr}
• \text { Product Warranty Expense } &200\\
• \text {Estimated Product Warranty Liability } &&200\\
• \end{array}\)
• C)
• \(\begin{array}{llr}
• \text { Product Warranty Expense } &20\\
• \text { Cash} & &20\\
• \end{array}\)
• D)
• \(\begin{array}{llr}
• \text {Estimated Product Warranty Liability } &50\\
• \text { Cash } &&50\\
• \end{array}\)

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Definitions:

Compelled

Forced to do something or feeling a strong urge or pressure to perform an action.

Takings Clause

A provision in the Fifth Amendment of the U.S. Constitution that prohibits the government from taking private property for public use without fair compensation.

Private Property

Ownership of land, resources, or objects by individuals or corporations, protected by law.

Just Compensation

The concept that property owners must be fairly compensated when their property is taken for public use under eminent domain.