Darwin Corporation's attorney has provided the following summaries of three lawsuits against Darwin:
• lawsuit A: The loss is probable and the loss can be reasonably estimated.
• lawsuit B: The loss is reasonably possible and the loss can't be reasonably estimated.
• lawsuit C: The loss is reasonably possible and the loss can be reasonably estimated.
Which of the following statements is incorrect?
A)A disclosure note is required for lawsuit A.
B)A disclosure note is required for lawsuit C.
C)A disclosure note is not required for lawsuit B.
D)Lawsuit A is reported on the balance sheet as a liability.

Question

Quizplus · Accepted Answer

A contingent liability that is reasonably possible is disclosed in the notes to the financial statements regardless of whether it can be reasonably estimated.

Darwin Corporation's Attorney Has Provided the Following Summaries of Three