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definitely exists as a liability but its amount and due date are
indeterminable.
is accrued even though not reasonably estimated.
is not disclosed in the financial statements.
is the result of a loss contingency.
Question 6. 6. (TCO D) Which of the following is a characteristic of the
expense warranty approach, but not the sales warranty approach?
(Points : 5)
Estimated liability under warranties
Warranty expense
Unearned warranty revenue
Warranty revenue
Question 7. 7. (TCO D) The term used for bonds that are unsecured
regarding principal is (Points : 5)
junk bonds.
debenture bonds.
in-debenture bonds.
callable bonds.
Question 8. 8. (TCO D) On July 1, 2009, Noble, Inc. issued 9% bonds
in the face amount of $5,000,000, which mature on July 1, 2015. The
bonds were issued for $4,695,000 to yield 10%, resulting in a bond
discount of $305,000. Noble uses the effective-interest method of
amortizing bond discount. Interest is payable annually on June 30. At
June 30, 2011, Noble's unamortized bond discount should be (Points : 5)
$264,050.
$255,000.
$244,000.
$215,000.