A Corporation Has Been Sued for Product Failures Allegedly Resulting

question 94

Multiple Choice

A corporation has been sued for product failures allegedly resulting in injuries to the individuals bringing the lawsuit.The company's lawyers believe it is more than remote,but less than probable,that the lawsuit will result in an actual liability.Which of the following actions should be taken by the company's management?

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

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Definitions:

Left-Brain Dominant

A characteristic where a person is more analytical, logical, and detail-oriented, often associated with the left hemisphere of the brain.

Cornell System

A note-taking system devised at Cornell University, designed to efficiently organize notes into summaries, cues, and note-taking sections.

Formal Outlines

Structured frameworks for organizing the main and supporting ideas of a speech, paper, or project, typically using a hierarchical system.

Linear Order

A sequence or arrangement where every element is compared, in order, to every other element.