James Is a Used Car Salesperson

question 38

Multiple Choice

James is a used car salesperson. He tells Mary that the vehicle he is selling to her has a new engine. James knows that what he is saying is not true. James could be liable for

• A) breach of fiduciary duty.
• B) defamation.
• C) breach of contract.
• D) negligence.
• E) fraudulent misrepresentation.

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Definitions:

Gross Profit

The difference between revenue and the cost of goods sold, representing the basic profitability of items or services before deducting operating expenses.

Cost of Goods Sold

The total cost directly associated with producing goods which have been sold.

Merchandise Sold

The products that a business sells to its customers, generating revenue.

Accounting Equation

A fundamental equation in accounting that states that assets equal liabilities plus owner's equity.