Response to the following questions:
1. Identify how to account for warranty costs under the expense warranty accrual method, sales warranty accrual method, and modified cash basis.
2. Define contingency. What exactly is the company uncertain about-whether a future event will take place and result in a liability, or whether a future event will take place that will confirm that a liability exists from an event that has already taken place?
If possible, please give examples to better understand your response.