Final answer:
When a company records a loss and a liability for termination benefits, it means the company is compensating employees for their termination. This is recognized as an expense and payable on the company's financial statements.
Step-by-step explanation:
When a company records a loss and a liability for termination benefits paid to employees, it usually occurs when the company terminates employees and is required to compensate them with benefits such as severance pay, unused vacation days, or retirement benefits. This liability is recognized on the company's financial statements as an expense and a payable. The loss is recorded to account for the decrease in the company's assets or increase in its liabilities.