Question 3

To record a contingent liability as an expense, the outcome must be:

Question 3 options:

	Probable.
	Estimable.
	Both a and b.
	Either a or b.
	None of the above.

Question 4

Tamarron Corporation warrants its products for 6 months. The estimated product warranty is 2% of sales. Assume that sales were $600,000 for January. Determine the warranty liability at the end of January.

Question 4 options:

	$0
	$12,000
	$10,000
	Unknown