Which of the following statements related to the balance sheet account 'Provision for Warranties' are correct? Select as many as you think are true.

Select one or more:

1.Are recognised as tax deductions when warranty claims are made by customers.

2.If the increase in the provision account is smaller than warranty claims made, the current tax liability will be increased.

3.A provision (liability account) exists in relation to warranties under both cash and accrual accounting.

4.Are recognised as expenses in accounting when warranty claims are made by customers.

5.If the increase in the provision account is greater than warranty claims made, the current tax liability will be increased.

6.Represent tax liabilities in the future

7.Every year there will be a deductible amount related to warranties in the calculation of current tax liability.

8.Under cash accounting, no liability account would exist in relation to warranties.

9.If no warranty repair work is done in a year, there will be no allowable tax deductions.

10.Represent tax assets in the future

Which of the following statements related to the balance sheet account Revenue Received in Advance are correct? Select as many as you think are true.

Select one or more:

1.When a customer pays in advance, the amount is always recognised immediately as income under cash accounting.

2.Represent tax liabilities in the future.

3.When a customer pays in advance, the amount is always recognised immediately as income under accrual accounting.

4.If the increase in the liability account is greater than the revenue earned by the entity this period, current tax liability will increase.

5.Prepaid income is taxable when the cash is received in advance.

6.Prepaid income is taxable when the income is earned in the future.

7.A balance day adjustment is made to reduce the liability and recognise the income that has been earned.

8.If the increase in the liability account is greater than the revenue earned by the entity this period, current tax liability will decrease.

9.A balance day adjustment is made to record the receipt of cash from customers.

10.Represent tax assets in the future.