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4 October, 00:10

Estimating warranty expenses at 2%, when past history suggests they have experienced 5%, results in an overstatement of expenses and an understatement of liabilities. A. True

B. False

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Answers (2)
  1. 4 October, 02:02
    0
    False

    Explanation:

    Warranty accruals will be accounted for when incurred through the following entries,

    Debit Warranty expense

    Credit Warranty accrual

    Using the history as a basis for accrual estimating the warranty expenses at 2% instead of 5% would result in an understatement of the two accounts stated above.

    These are the expense and accrual accounts. As such the answer is false
  2. 4 October, 02:34
    0
    Answer: option B: False

    Explanation:

    Liabilities and Expenses will both be understated
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