In a service-type warranty, warranty revenue is recognized equally over the warranty period. recognized in the year of sale. O not recognized. O recognized only in the last year of the warranty period. General-purpose financial statements are the product of O financial accounting. O managerial accounting. O both financial and managerial accounting. O neither financial nor managerial accounting. How does accounting help the capital allocation process attract investment capital? By encouraging innovation. O By promoting productivity. By providing timely, relevant information and by encouraging innovation. By providing timely, relevant information. What is the objective of financial reporting? O Provide information that clearly portrays nonfinancial transactions. O Provide information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors. O Provide information that excludes claims to the resources. O Provide information that is useful to management in making decisions. Generally accepted accounting principles are fundamental truths or axioms that can be derived from laws of nature. derive their authority from legal court proceedings. derive their credibility and authority from general recognition and acceptance by the accounting profession. O have been specified in detail in the FASB conceptual framework. A soundly developed conceptual framework of concepts and objectives should O increase financial statement users' understanding of and confidence in financial reporting. enhance comparability among companies' financial statements. O allow new and emerging practical problems to be more quickly solved. O all of these answer choices are correct. What is a purpose of having a conceptual framework? O To make sure that economic activity can be identified with a particular legal entity. O To segregate activities among different companies. O To provide comparable information for different companies. O To enable the profession to more quickly solve emerging practical problems and to provide a foundation from which to build more useful standards. When is a contingent liability recorded? When the future events are probable to occur and the amount can be reasonably estimated. When the future events are probable to occur. When the future events will possibly occur and the amount can be reasonably estimated. When the amount can be reasonably estimated. Unrealized holding gains or losses which are recognized in income are from debt securities classified as O held-to-maturity. O available-for-sale. O trading. none of these answers are correct. Debt securities that are accounted for at amortized cost, not fair value, are O available-for-sale debt securities. O trading debt securities. O held-to-maturity debt securities. never-sell debt securities