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MC Qu$.16$ Warren Advertising becomes aware of a$...$

Warren Advertising becomes aware of a lawsuit after the end of the fiscal year, but prior to the issuance of financial statements. A loss should be accrued and a liability should be reported if the amount can be reasonably estimated and:

Multiple Choice

The cause for action occurred prior to the end of the fiscal year.

The contingency should not be accrued.

The damages would be payable within a year.