26) Which statement about warranties is correct?
A) Warranties sold separately are accounted for under IAS37.
B) Warranties sold separately are accounted for under IAS18.
C) Warranties are financial liabilities and accounted for at fair value.
D) Expected value uses a weighted average of possible outcomes.
27) Which statement about warranties is correct?
A) Warranties are provisions.
B) Warranties included with the product sold are accounted for under IAS18.
C) Warranties are financial liabilities.
D) Warranties included with the product sold are accounted for under IAS39.
28) Sales made in fiscal 2012 for $50,000,000 include a 5 year warranty coverage. The estimated cost for warranty is expected to be 2% for the first 4 years and 5% for the last year. Determine how much warranty expense will be recorded in fiscal 2012.
A) 1,000,000
B) 4,000,000
C) 5,000,000
D) 6,500,000
29) Which statement about deferred revenue is correct?
A) Deferred revenue is a financial liability.
B) Deferred revenue is a non-financial liability.
C) Deferred revenue is a held for trading financial liability.
D) Deferred revenue arises when the contract is signed.
30) Which statement about deferred revenue is correct?
A) Deferred revenue is always a non-current liability.
B) Deferred revenue could arise from loyalty programs.
C) Deferred revenue is measured using expected values.
D) Deferred revenue arises when the goods are shipped.
31) AV Airlines sold a ticket on May 1, 2012 for travel on Jun 15, 2012 for $1,500. The customer paid at time of booking the flight. Provide the necessary journal entries.