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Ultimate Company is a defendant in a lawsuit alleging damages of $3 billion. The litigation...

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Accounting

Ultimate Company is a defendant in a lawsuit alleging damages of $3 billion. The litigation is expected to continue for several years, and no reasonable estimate can be made at this time of Ultimate Company's ultimate financial responsibility. This situation is an example of:
Multiple Choice
k
ences
Off-balance-sheet financing.
A loss contingency that should be disclosed in notes to Ultimate Company's financial statements.
An estimated liability that must appear in Ultimate Company's balance sheet.
A loss in purchasing power caused by inflation.

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