Existing Claims Related to Product Warranties and Litigation as of December

question 26

Multiple Choice

Existing claims related to product warranties and litigation as of December 31, 2014, indicate that it is probable that a liability has been incurred. However, as of December 31, 2014, the exact amount of the obligation cannot be reasonably estimated, but a range of possible amounts has been determined. Based on these facts, an estimated loss contingency should be

• A) accrued
• B) disclosed but not accrued
• C) neither accrued nor disclosed
• D) classified as an appropriation of retained earnings

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Definitions:

Esteem

A regard or respect for oneself or others; often refers to holding someone in high regard or valuing their abilities and qualities.

Competence

The ability to do something successfully or efficiently, reflecting a person's knowledge or skill.

Autonomy

The capacity to make an informed, uncoerced decision; often associated with the ability to act on one's own values and interests.

Hunger

A physical sensation and physiological need prompting the desire to eat, driven by the body's energy requirements.