Question
Cruiser guarantee a loan of P200,000 granted to Stallman. At the time when the financial statements of Cruiser are being finished, it is clear that
Cruiser guarantee a loan of P200,000 granted to Stallman. At the time when the financial statements of Cruiser are being finished, it is clear that Stallman is in financial difficulties and it is probable that Cruiser will meet the guarantee. In the financial statements, Cruiser should
A. Only disclose in the notes the amount of the guarantee
B. Recognize a provision for liability of P200,000
C. Not recognize and need not disclose the guarantee
D. Recognize a provision for liability of P200,000 and also disclose in the notes to financial statements.
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