This is just Multiple choice questions. dont need explanations.

1.

Which of the following situations may give rise to an unearned revenue?

A

Providing credit sales to customers.

B

Selling inventory for cash.

C

Selling magazine subscriptions.

D

Providing product warranty.

2.

Which of the following statements describes the accrual method of accounting for

warranty cost?

A

Record expense when paid.

B

Record expense when warranty claims are certain.

C

Record expense based on estimate in year of sale.

D

Record expense when incurred.

3.

Which of the following accounting entries records sales tax collected by a company on

behalf of the state and local government?

A

A debit to an expense account.

B

A credit to a revenue account.

C

A debit to a revenue account.

D

A credit to a liability account.

4.

Happy Store sells television sets with one-year warranties to cover repair and

replacement of television parts. In the month of June 2020, Happy Store sells 40

television sets for $500 per set. Happy Store estimates warranty fulfillment at 10% of

sales. Calculate the amount of warranty liability that should be reported in Happy

Stores book of accounts.

A

$1 000.

B

$2 000.

C

$500.

D

$20 000.