A potential legal claim which is probable and the amount can be reasonably estimated should be: O recorded in the financial statements as a contingent liability. O disclosed in the notes while the lawsuit is outstanding. O disclosed in the notes when the lawsuit is settled. O is a potential liability that has arisen because of a past event or transaction.

A potential legal claim which is probable and the amount can be reasonably estimated should be: recorded in the financial statements as a contingent liability. disclosed in the notes while the lawsuit is outstanding. disclosed in the notes when the lawsult is settled. is a potential liability that has arisen because of a past event or transaction