28.1k views
4 votes
A restaurant has been sued because a customer claims to have found a bug in her chili. The company's lawyers believe there is only a remote possibility that the lawsuit will result in an actual liability. Which of the following actions should be taken by the company's management?a.The situation should be described in a note to the financial statements.b.The possible liability should be ignored.c.The liability should be estimated and recorded as an expense.d.Management should consider resigning

1 Answer

1 vote

Answer:The situation should be described in a note to the financial statement.

Step-by-step explanation:

Since there is a remote possibility of a liability been incurred in the case, the management should only bring it to shareholders knowledge by way of note in the financial statement and

User Adergaard
by
8.5k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.