Which of the Following Situations Require Recording a Liability in 2014

question 88

Multiple Choice

Which of the following situations require recording a liability in 2014? (More than one answer may be correct.)

• A) In 2014, a company manufactures and sells stereo equipment which carries a three-year warranty.
• B) In 2015, a theater group receives payments in advance from season ticket holders for productions to be performed in 2015.
• C) A company is a defendant in a legal action. At the end of 2014, the company's attorney feels it is possible the company will lose, and that the amount of the loss might be material.
• D) During 2014, a Beijing agricultural co-operative is concerned about the risk of loss if inclement weather destroys the crops.

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Definitions:

Stagflation

An economic condition characterized by high inflation, high unemployment, and stagnant demand in a country’s economy.

Aggregate Demand

The collective demand for all goods and services within a particular economy at a specific price level and time period.

Aggregate Demand

is the total demand for all goods and services within a particular market or economy at a given price level and in a given time period.

Economic Fluctuations

Variations in the level of economic activity in a country over time, characterized by periods of boom and recession.