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QUESTION 1 A company has become involved in a lawsuit at the end of its reporting period. While the company hopes to win the case and receive a substantial payout during the next reporting period for damages, it has not recorded an asset in its Balance Sheet but rather has provided details about the lawsuit in the notes. What sort of an accounting issue is this an example of? O 1. Accrual accounting 2. Fair value versus historical cost O 3. Recognition versus disclosure 4. Clean versus dirty surplus accounting