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

question 101

Multiple Choice

Mighty Burger 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. Mighty Burger's attorneys have advised them that the likelihood of a future obligation from the suit is remote. As a result of the lawsuit, Mighty Burger should:

• A)Disclose the lawsuit in the footnotes 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:

Play Materials

Items and resources used to facilitate play and encourage learning and development in children.

Piaget

Refers to Jean Piaget, a Swiss psychologist known for his pioneering work in the study of child development and his theory of cognitive development.

Formal Operational Stage

A phase in Jean Piaget's theory of cognitive development where individuals (around age 11 and older) gain the ability to think abstractly and reason logically.

Cause and Effect

The relationship between events where one is the result of the other or others, a fundamental concept in identifying reasons behind certain outcomes.