A Restaurant Has Been Sued Because a Customer Claims to Have

question 64

Multiple Choice

A restaurant has been sued because a customer claims to have found a bug in her chili.The company's lawyers believe there is only a remote possibility that the lawsuit will result in an actual liability.Which of the following actions should be taken by the company's management?

• A) The situation should be described in a note to the financial statements.
• B) The possible liability should be ignored.
• C) The liability should be estimated and recorded as an expense.
• D) Management should consider resigning.

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Definitions:

Tertiary Form

In education and economic sectors, refers to services, as opposed to primary (extraction) and secondary (manufacturing) activities.

Augmented Reality

A technology that superimposes computer-generated images on a user's view of the real world, providing a composite view that augments the real environment.

Virtual Reality

A simulated experience created with computer technology, which can replicate an environment or simulate a presence in real or imagined worlds.

Mainframes

High-performance computers used primarily by large organizations for bulk data processing, such as census, industry and consumer statistics, ERP, and financial transaction processing.