Question

Warranty obligations are contingent liabilities that must be recognized and reported in a company's published financial statements. This statement is

A. True
B. False

Answer 1

True. Warranty obligations are indeed contingent liabilities that must be recognized and reported in a company's financial statements.

Step-by-step explanation:

The statement is True. Warranty obligations are considered contingent liabilities because they depend on future events that may or may not occur. According to accounting standards, companies must recognize and report these liabilities in their financial statements. This is important for the transparency and accuracy of the financial information presented to stakeholders.