Burger Barn Has Been Named as a Plaintiff in a $5

question 102

Multiple Choice

Burger Barn has been named as a plaintiff in a $5 million lawsuit filed by a customer over the addictive nature of the company's french fries.Burger Barn's attorneys have advised them that the likelihood of a future obligation from the suit is remote.As a result of the lawsuit,Burger Barn should:

• A)Disclose the lawsuit in the notes to the financial statements.
• B)Recognize a $5 million liability on its balance sheet for the contingency.
• C)Ignore the lawsuit in its financial statements.
• D)Settle with the customer immediately for $5 million to avoid harmful publicity.

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Definitions:

Oil Glands

Specialized glands in the skin that produce and secrete oils to lubricate and waterproof the skin and hair.

Skin Supple

Describes skin that is soft, flexible, and moisturized, indicating health and hydration.

Endocrine System

The endocrine system is a collection of glands that produce hormones regulating metabolism, growth and development, tissue function, sexual function, reproduction, sleep, and mood, among other things.

Coordinating

The process of organizing and aligning activities or elements to work together effectively towards a goal or function.