[The Following Information Applies to the Questions Displayed Below

question 49

Multiple Choice

[The following information applies to the questions displayed below.]

In December Year 1, Lucas Corporation sold merchandise for $10,000 cash. Lucas estimated that the warranty obligation relating to this sale is $700. On February 12, Year 2, Lucas paid cash of $550 to settle a related warranty claim by this customer.

-Which of the following summarizes the effect of the payment of cash to settle the warranty claim in Year 2 on the elements of the financial statements?

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Monkey

A primate belonging to the group that typically has a tail and is smaller than an ape, often noted for high intelligence and agile movements.

Phobia

An extreme or irrational fear or aversion to something, often resulting in avoidance behavior and distress.

Systematic Desensitization

A therapeutic technique used to help individuals overcome phobias and anxiety, involving gradual exposure to the feared object or situation.

Phobia Development

The process through which an irrational and intense fear of a specific object, scenario, or activity is formed, often resulting from a negative experience or predisposition.