Which of the following is a contingency that should be recorded in the financial statements? Multiple Choice The company offers a four-year warranty and the expenses can be reasonably estimated. It is probable that the company will receive $100,000 in settlement of a lawsuit. The company is being sued and a loss is reasonably possible and reasonably estimable. The company deducts life insurance premiums from employees' paychecks. The primary difference between accrual-basis and cash-basis accounting is: Multiple Choice Adjusting entries are only a necessary part of cash-basis accounting. The timing of when revenues and expenses are recorded. Accrual-basis accounting violates both the concepts of revenue recognition and expense recognition. Cash-basis accounting is allowed for financial reporting purposes but not accrual-basis accounting. Oliver Inc. recorded a $2 million gain on the sale of land. Where should the gain be reported in the financial statements? Multiple Choice Other revenues. Other expenses. A gain from discontinued operations. A separate line item in retained earnings. Which of the following does not change the balance in the Accounts Receivable account (assume company is using the allowance method)? Multiple Choice Collections on customer accounts. Returns on credit sales. Bad debt expense adjustment. Write-offs