Which of the Following Situations Require Recording a Liability in 2011

question 198

Multiple Choice

Which of the following situations require recording a liability in 2011? (More than one answer may be correct.)

• A) In 2011, a company manufactures and sells stereo equipment which carries a three-year warranty.
• B) In 2011, a theater group receives payments in advance from season ticket holders for productions to be performed in 2012.
• C) A company is a defendant in a legal action. At the end of 2011, the company's attorney feels it is possible the company will lose, and that the amount of the loss might be material.
• D) During 2011, a midwest agricultural co-operative is concerned about the risk of loss if inclement weather destroys the crops.