1. Rashid Ltd. sold $12,000 worth of trampolines with a one year warranty. The company

estimates that 2% of the sales will result in warranty work. Rashid should:

A) Recognize warranty expense in the same year as the sale.

B) Recognize warranty expense at the time warranty work is performed.

C) Recognize warranty liability in the same year as the sale.

D) Recognize warranty expense and liability in the same year as the sale.

E) Recognize warranty expense at the time warranty work is performed and warranty

liability in the same year as the sale.

8. Under IFRS, contingent liabilities must be recorded if:

A) The future event is probable and the amount can be reasonably estimated.

B) The future event is unlikely.

C) The future event is likely and the amount can be reasonably estimated.

D) The future event is unlikely, but the amount can be reasonably estimated.

E) The future event is probable, but the amount cannot be reasonable estimated.

9. Fees accepted in advance from a client:

A) Are recorded as earned revenues on the income statement.

B) Increase profit.

C) Are recorded as liabilities.

D) Do not increase assets.

E) None of the above answers are correct.

10. Harmonized sales tax payable:

A) Is an estimated liability.

B) Is a contingent liability.

C) Is a current liability.

D) Is a business expense.

E) All of the above answers are correct.