Which of the following is an example of a loss contingency that should be disclosed in a footnote to a company's financial statements?
A. The company owns special-purpose machinery that, if sold, would probably bring a price less than its current book value.
B. A lawsuit has been brought against the company, but the company hopes to prevail in the suit and thereby avoid any liability.
C. The allowance for uncollectible accounts receivable is estimated at $200,000.
D. The president of the company has threatened to resign if the board of directors does not vote to increase executive salaries.
Answer: B
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Indicate whether the statement is true or false
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