Asked by Bailey Ables on Jul 05, 2024
Verified
Companies sometimes create liabilities that exceed their assets when they lose a lawsuit.
Liabilities
Liabilities are financial obligations or debts that a business has to pay back in the future, such as loans, accounts payable, and mortgages.
Assets
Refers to resources owned by a company or individual that have economic value and can provide future benefits.
- Understand the implications of financial decisions on a company's survival and profitability.
Verified Answer
JH
Jackie HerreraJul 11, 2024
Final Answer :
True
Explanation :
When a company loses a lawsuit, they may be required to pay damages or settlements that exceed the value of their assets, creating a liability.
Learning Objectives
- Understand the implications of financial decisions on a company's survival and profitability.
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