BUS1 121A Lecture 13: CHAPTER 13 + 20
Document Summary
Inherent warranty: warranty starts when product sold. Time passing under the service contract unearned rev. Extended warranty: separate sales contract, starts when the inherent warranty ends. Time passing under the extended warranty contract unearned rev. Sales tax w/ warranty: paid in cash & credit. A loss that may or, may not, exist, depending upon some outside future event: probable and estimable journal entry, warranty liability, promotional liability, allowance for doubtful accounts, probable but not estimable disclose in notes. Lawsuits, guarantees: remote (unlikely to happen) ignored. Generally ignored, unless (1), when they are disclosed in notes. Gift cards: unearned rev, earn rev when using gift card. Exception short-term debt is recorded at present value if it has an unrealistic interest rate. Principles: a change from one form of gaap to another form of. Gaap (change in method: a change from a non-gaap method to gaap is an error correction.
