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Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372 Exercise 98
A company is facing a class-action lawsuit in the upcoming year. It is possible, but not probable, that the company will have to pay a settlement of approximately $2,000,000. How would this fact be reported in the financial statements to be issued at the end of the current month
A) $ 2.000,000 in the current liability section.
B) $ 2,000,000 in the long-term liability section.
C) In a descriptive narrative in the footnote section.
D) None because disclosure is not required.
A) $ 2.000,000 in the current liability section.
B) $ 2,000,000 in the long-term liability section.
C) In a descriptive narrative in the footnote section.
D) None because disclosure is not required.
Explanation
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If there is high likeliness of a liabili...
Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
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