Which of the Following Is an Example of Consequential (Indirect)loss

question 42

Multiple Choice

Which of the following is an example of consequential (indirect) loss?

• A)the theft of a person's jewelry
• B)the destruction of a firm's manufacturing plant by an earthquake
• C)the cost of renting a substitute vehicle while a collision-damaged car is being repaired
• D)the vandalism of a person's automobile

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Definitions:

Fair Value

An estimate of the price at which an asset or liability could be exchanged in a current transaction between willing, unrelated parties.

Business Combination

A transaction or event that brings two or more companies together to form a single entity, often through mergers, acquisitions, or consolidations.

Gain On Bargain Purchase

Financial gain recognized when a company acquires assets for less than their fair market value.

Deferred Tax Implications

The financial effects on future tax payments or receipts due to temporary differences between the book value and tax base of assets and liabilities.