Question

Huprey Co. is the defendant in the following legal claims. For each of the following separate claims, indicate whether Huprey should (a) record a liability, (b) disclose in notes, or (C) have no disclosure. 1. There is a remote (unlikely) chance Huprey will lose a pending lawsuit. The plaintiff is suing Huprey for $5,000,000. 2. Huprey can resonably estimate that a pending lawsuit will result in damages of $1,250,000. It is probable that Huprey will lose the case. 3. It is reasonably possible that Huprey will lose a pending lawsuit. Huprey and its lawyers cannot estimate what the damages will be if it loses.

Answer 1

1. (a) Record a liability

2. (a) Record a liability

3. (b) Disclose in notes

What happens if you fail to record a liability?

Frequently, failing to register a responsibility entails also neglecting to record an expense. Income is decreased by expenses; but, in this case, this wasn't documented so that net income wouldn't be impacted when it should have been. The net income will be overstated as a result.

On a balance sheet, how do you record liabilities?

Unearned income or a "payables" account is normally where liabilities are recorded. In most cases, unless they are regarded as contra liabilities, they have a credit balance. As a result of discounting or lowering the amount owed, this kind of liability has a negative balance.

To know more about record a liability visit:

brainly.com/question/14266222

#SPJ4