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Taco Tims has been named as a plaintiff in a 5 million Dollar lawsuit filed...

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Accounting

Taco Tims has been named as a plaintiff in a 5 million Dollar lawsuit filed by a customer over the addictive nature of the companies French fries. Taco Tims Attorneys have advised them that the likelihood of losing the lawsuit is probable. As a result of the lawsuit taco Tims should
A. Disclosure the lawsuit in the notes to the financial statements
B. Recognize a 5 million dollar liability on the balance sheet for the contingency.
C. Ignore the lawsuit and its financial statements
D. Settle with the customer immediately for the 5 million dollars to avoid harmful publicity.

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