I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

What is the effect of the above on the financial statements of Booker Co? 

A 

A provision should be created 

B 

A contingent liability should be disclosed 

C 

A contingent asset should be disclosed 

D No 

effect 

 

(2 marks) 

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           PRACTICE QUESTION BANK 

 

496

 

53 

Raider Co has to include the following items in its financial statements.  

1 

Raider Co has been sued by Space Co for breach of trademark. Raider Co strongly 

disputes the claim and Raider Co's lawyers advise that the likelihood of having to pay any 

money to Space Co for the claim is remote. 

2 

Raider Co gives warranties on its products. Data from previous years show that about 

15% of sales give rise to a warranty claim.