Final answer:
Legal settlements are considered contingent liabilities because they involve uncertain future events that could result in an obligation to pay. They should be recorded in financial statements when it is probable that a liability has been incurred, and the amount can be reasonably estimated. Routine maintenance, employee benefits, and marketing expenses are regular operating expenses, not contingent liabilities.
Step-by-step explanation:
The question pertains to the concept of contingent liabilities in accounting. In financial reporting, contingent liabilities are potential liabilities that could become actual liabilities depending on the outcome of a future event. Among the options provided, A) Legal settlements are the most likely to lead to contingent liabilities that should be recorded. This is because the outcome of legal actions is uncertain and could result in an obligation to pay damages or settlements. Routine maintenance, employee benefits, and marketing expenses are typically considered operating expenses and are not contingent liabilities as they don't involve an uncertain future event.