in the accounting records of a defendant, lawsuits: multiple choice are known liabilities. should always be…

in the accounting records of a defendant, lawsuits: multiple choice are known liabilities. should always be recorded as a liability. should always be disclosed in financial statement notes. should be recorded if payment for damages is probable and the amount can be reasonably estimated

in the accounting records of a defendant, lawsuits: multiple choice are known liabilities. should always be recorded as a liability. should always be disclosed in financial statement notes. should be recorded if payment for damages is probable and the amount can be reasonably estimated

Answer

Brief Explanations:

In accounting, contingent liabilities like lawsuits are recorded as liabilities when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount can be reasonably estimated. They are not always recorded or disclosed in a blanket - way. Known liabilities are definite obligations, and lawsuits are often contingent.

Answer:

Should be recorded if payment for damages is probable and the amount can be reasonably estimated.