Company A was sued by Company B. The management of Company A feels that it is probable that it will have to pay the full amount to Company 8. What is the effect of this contingent event on Company A's accounting equation? a. Increase liabilities and decrease stockholders' equity.
b. Increase assets and increase stockholders' equity.
c. No effect on the accounting equation.
d. Decrease assets and decrease liabilities.

a. Increase liabilities and decrease stockholders' equity.

Explanation:

Contingent Liabilities are obligations that the company may owe if a future event happens such as them being ruled against in a case in court.

Contingent Liabilities are to be recorded in the financial statements only when it is probable that it will happen and that the amount to be paid is reasonably estimable.

Company A's management feels like the loss is probable and that they would have to pay the full amount to company B which means that the loss is both likely and estimable.

Company A should therefore increase their liabilities and debit loss which will come from the Equity thereby reducing it.

being born in poverty would limit the people's chances, opportunities and benefits.

this happen because of several things, such as:

- poor people tend to gain less access to good education and nutrition. this mean that their chance to obtain high paying jobs would also be limited.

- poor people tend to socialize with other poor people while the rich tend to socialize with other rich people. this means that simply throguh their social circle, rich people would have more business opportunities compared to the poor people.

- rich people tend to have more capital in their disposal. this would benefit them in business since it is far easier for them to fund their business operation compared to poor people.