Volt Electronics sells equipment that includes a three-year warranty. Repairs under the warranty are performed by an independent service company under a contract with Volt. Based on prior experience, warranty costs are estimated to be $25 per item sold. Volt should recognize these warranty costs: When the equipment is sold. When the repairs are performed. Evenly over the life of the warranty. When payments are made to the service firm. Away Travel filed suit against West Coast Travel seeking damages for copyright violations. West Coast Travel's legal counsel believes it is reasonably possible that West Coast Travel will settle the lawsuit for an estimated amount in the range of $100,000 to $200,000, with all amounts in the range considered equally likely. How should West Coast Travel report this litigation? As a liability for $100,000 with disclosure of the range. As a liability for $200,000 with disclosure of the range. As a disclosure only. No liability is reported. As a liability for $150,000 with disclosure of the range. Large, highly-rated firms sometimes sell commercial paper: Because they can't borrow anywhere else. To borrow funds at a lower rate than through a bank. To borrow funds when they cannot obtain a loan from a bank. To improve their credit rating. In accounting, goodwill May be recorded whenever a company achieves a level of net income that exceeds the industry average. Must be expensed in the period it is recorded because benefits from goodwill are difficult to identify. May be recorded when a company purchases another business. Is amortized over its useful life. 5 pts A company has the following inventory information for the year January 1 Beginning inventory- 100 units @$10 March 15 Purchased 500 units @ $12 September 20 Purchased 800 units @ $15 Total sales for the year = 1,200 units The company reports cost of goods sold of $16,000. Which inventory cost method is the company using? LIFO. The answer cannot be determined with the information given. FIFO Weighted-average. pts When $2,500 of accounts receivable are determined to be uncollectible, which of the following should the company record to write off the accounts using the allowance method? A debit to Bad Debt Expense and a credit to Allowance for Uncollectible Accounts A debit to Allowance for Uncollectible Accounts and a credit to Bad Debt Expense. A debit to Bad Debt Expense and a credit to Accounts Receivable. A debit to Allowance for Uncollectible Accounts and a credit to Accounts Receivable. Volt Electronics sells equipment that includes a three-year warranty. Repairs under the warranty are performed by an independent service company under a contract with Volt. Based on prior experience, warranty costs are estimated to be $25 per item sold. Volt should recognize these warranty costs: When the equipment is sold. When the repairs are performed. Evenly over the life of the warranty. When payments are made to the service firm. Away Travel filed suit against West Coast Travel seeking damages for copyright violations. West Coast Travel's legal counsel believes it is reasonably possible that West Coast Travel will settle the lawsuit for an estimated amount in the range of $100,000 to $200,000, with all amounts in the range considered equally likely. How should West Coast Travel report this litigation? As a liability for $100,000 with disclosure of the range. As a liability for $200,000 with disclosure of the range. As a disclosure only. No liability is reported. As a liability for $150,000 with disclosure of the range. Large, highly-rated firms sometimes sell commercial paper: Because they can't borrow anywhere else. To borrow funds at a lower rate than through a bank. To borrow funds when they cannot obtain a loan from a bank. To improve their credit rating. In accounting, goodwill May be recorded whenever a company achieves a level of net income that exceeds the industry average. Must be expensed in the period it is recorded because benefits from goodwill are difficult to identify. May be recorded when a company purchases another business. Is amortized over its useful life. 5 pts A company has the following inventory information for the year January 1 Beginning inventory- 100 units @$10 March 15 Purchased 500 units @ $12 September 20 Purchased 800 units @ $15 Total sales for the year = 1,200 units The company reports cost of goods sold of $16,000. Which inventory cost method is the company using? LIFO. The answer cannot be determined with the information given. FIFO Weighted-average. pts When $2,500 of accounts receivable are determined to be uncollectible, which of the following should the company record to write off the accounts using the allowance method? A debit to Bad Debt Expense and a credit to Allowance for Uncollectible Accounts A debit to Allowance for Uncollectible Accounts and a credit to Bad Debt Expense. A debit to Bad Debt Expense and a credit to Accounts Receivable. A debit to Allowance for Uncollectible Accounts and a credit to Accounts Receivable