Multiple Choice
Ultimate Company is a defendant in a lawsuit alleging damages of $3 billion.The litigation is expected to continue for several years,and no reasonable estimate can be made at this time of Ultimate Company's ultimate financial responsibility.This situation is an example of:
A) Off-balance-sheet financing.
B) A loss contingency which should be disclosed in notes to Ultimate Company's financial statements.
C) An estimated liability which must appear in Ultimate Company's balance sheet.
D) A loss in purchasing power caused by inflation.
Correct Answer:
Verified
Correct Answer:
Verified
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