Unformatted text preview: contracts are deferred as a liability at the time of sale, and recognized over the contract period on a straight-line basis. 2. Sale of extended warranty: Adjusting journal entry in each period of the warranty to recognize revenue: AACSB: Analytic AICPA FN: Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 13-04 Determine when a liability can be classified as a noncurrent obligation. Learning Objective: 13-05 Identify situations that constitute contingencies and the circumstances under which they should be accrued. Topic: Identify contingencies Topic: Liabilities from advance collections...
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- Spring '11
- Contract Law, Generally Accepted Accounting Principles, extended warranty, 1-year