The Cause for Litigation Must Have Occurred on or Before

question 74

True/False

The cause for litigation must have occurred on or before the date of the financial statements to report a liability in the financial statements.

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Definitions:

Normal Course of Business

The regular, day-to-day activities and operations conducted by a company to generate revenue.

Stock Dividend

A disbursement by a company to its stockholders, consisting of extra shares instead of monetary funds.

Cash Dividend

A cash dividend refers to the distribution of profits by a corporation to its shareholders in the form of cash.

Stock Split

A corporate action in which a company divides its existing shares into multiple ones to boost the liquidity of the shares, though the company's market capitalization remains unchanged.