You are a CPA working for GE. You are responsible for managing the manufacturer’s warranties and the point of sale, add-on-warranties that customers purchase:
Explain the accounting for each warranty type, along with the impact on the financial statements.
Explain why the reporting of each differs.
Include each type of warranty’s redemption and expiration process and their effect on the income statement and balance sheet.
Differentiate between a determinable current liability and a contingent liability. Please describe the conditions that should be present for recording a contingent liability.
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