The auditor for Universal Tools,Inc.discovered in 2017 that the warranty liability account showed a $25,000 debit balance.She reasoned that the correct treatment of this discovery is to ________.
A) conduct a fraud investigation to see if a fraud has occurred
B) make engineering investigate to see if there is a production failure
C) wait until next year to see if the trend continues
D) investigate and increase the warranty expense and liability to an appropriate level
Correct Answer:
Verified
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