Which of the following is a contingency that should be recorded?
A)The company is being sued and a loss is reasonably possible and reasonably estimable.
B)The company deducts life insurance premiums from employees' paychecks.
C)The company offers a two-year warranty and the expenses can be reasonably estimated.

Question

Quizplus · Accepted Answer

A warranty is a common example of a contingency that should be recorded because the expenses can be reasonably estimated and it is probable that the company will incur these costs.

Which of the Following Is a Contingency That Should Be