under what condition is a pending lawsuit recognized as a liability on a companys balance sheet? multiple…
under what condition is a pending lawsuit recognized as a liability on a companys balance sheet? multiple choice the outcome is probable. the amount can be reasonably estimated. the outcome is reasonably
Answer
Brief Explanations:
For a pending lawsuit to be recognized as a liability on a company's balance - sheet, two main criteria must be met. First, it must be probable that the company will be liable. Second, the amount of the liability must be reasonably estimable. Both conditions are necessary.
Answer:
Neither option provided alone is correct. A pending lawsuit is recognized as a liability when both the outcome is probable and the amount can be reasonably estimated.