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Theta Enterprises is suspected of misstating their liabilities. The balance sheet shows $2,000,000 in total liabilities, but an internal review indicates additional liabilities worth $800,000.

Theta Enterprises is suspected of misstating their liabilities. The balance sheet shows $2,000,000 in total liabilities, but an internal review indicates additional liabilities worth $800,000. Moreover, there are unrecorded contingent liabilities of $300,000.

Requirement: Calculate the true total liabilities and discuss the implications of not recording these liabilities accurately.


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