Asked by MaryJean Throm on May 22, 2024
Verified
In the accounting records of a defendant,lawsuits:
A) Are known liabilities.
B) Should always be recorded.
C) Should always be disclosed.
D) Should be recorded if payment for damages is probable and the amount can be reasonably estimated.
E) Should never be recorded.
Contingent Liability
A potential financial obligation that may occur in the future depending on the outcome of a specific event.
Lawsuits
Legal actions or proceedings brought by one party against another for enforcing or defending a legal right.
Known Liabilities
Obligations or debts of a business that are quantifiable and for which the entity is certain about the amount and timing of payment.
- Identify the accounting methods for handling contingencies such as lawsuits and uncertainties, along with the necessities for their disclosure.
Verified Answer
Learning Objectives
- Identify the accounting methods for handling contingencies such as lawsuits and uncertainties, along with the necessities for their disclosure.
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