Question

A company has been sued for product failures allegedly resulting in injuries to the individuals bringing the lawsuit. The​ company's lawyers believe it is more than​ remote, but less than​ probable, that the lawsuit will result in an actual liability. Which of the following actions should be taken by the​ company's management?

Answer 1

Company makes various laws and rights that are beneficial for the company, workers as well as the customers. The company has also to look after the proper management and maintenance of laws.

The financial statement of the company can be described by the earning and loss has been made by the country. The lawsuit is always result in the liabilities. In the given situation in the question, the company's situation must be described in the note to the financial statement.