Leaders from several states of a nation meet once a year to settle common issues. They govern their own states independently, but they work together on issues that affect them all like trade and defense. They do not have a central government that handles these matters or collects taxes. Rather, each member state agrees to this yearly meeting and to follow agreements made there. Yet nothing forces them to keep these agreements other than an interest in maintaining friendly ties with the other members. Which system of government does this nation have?

The following legal claims exist for m. finger co. identify the accounting treatment for each claim as either (a) a liability that is recorded or (b) an item described in notes to its financial statements. 1. m. finger (defendant) estimates that a pending lawsuit could result in damages of $1,250,000; it is reasonably possible that the plaintiff will win the case. an item described in notes to its financial statements. a liability that is recorded. 2. m. finger faces a probable loss on a pending lawsuit; the amount is not reasonably estimable. a liability that is recorded. an item described in notes to its financial statements. 3. m. finger estimates damages in a case at $3,500,000 with a high probability of losing the case. an item described in notes to its financial statements. a liability that is recorded. the amount that m. finger co. should record in its accounting records related to these suits is: