The Journal Entry a Company Uses to Record the Estimated

question 95

Multiple Choice

The journal entry a company uses to record the estimated accrued product warranty liability is

• A) debit Product Warranty Expense; credit Product Warranty Payable
• B) debit Product Warranty Payable; credit Cash
• C) debit Product Warranty Expense; credit Cash
• D) debit Product Warranty Payable; credit Product Warranty Expense

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Definitions:

Bilateral Contract

A type of agreement in which both parties involved promise to perform certain actions or obligations.

Consideration

A legal concept referring to something of value exchanged between parties in a contract, making the agreement binding and enforceable.

Unforeseen Circumstances

Events that could not have been predicted or expected and may impact contractual agreements or obligations.

Preexisting Duty Rule

A legal principle that asserts no additional consideration is necessary to modify a contract when a party is already legally obligated to perform a duty.