In the accounting records of a defendant, lawsuits: Are estimated liabilities Should always be recorded Should always be disclosed Should be recorded if payment for damages is probably and the amount can be reasonably estimated Should never be recorded

Finance Mar 25, 2021

In the accounting records of a defendant, lawsuits:

1. Are estimated liabilities
2. Should always be recorded
3. Should always be disclosed
4. Should be recorded if payment for damages is probably and the amount can be reasonably estimated
5. Should never be recorded

Expert Solution

Answer:

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

Step-by-Step explanation

Accounting entry for the defendants must be recorded if amount of damages and its payment is reasonably estimated. Without the probability of its payment the firm should not enter the amount in the books.

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