On Which of the Following Theories Under Common Law Can

question 84

Multiple Choice

On which of the following theories under common law can an accountant be held liable to parties with whom the accountant is not in privity?

• A) breach of contract
• B) fraud
• C) breach of contract or fraud
• D) neither breach of contract nor fraud

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Definitions:

Post-Closing Trial Balance

A list of all accounts and their balances after closing entries are made, used to check the equality of debits and credits and prepare for the next accounting period.

Income Statement

A financial statement that shows a company's revenues, expenses, and profits or losses over a specific period.

Balance Sheet Account Balances

The values recorded in the accounts that appear on a company's balance sheet, representing assets, liabilities, and shareholders' equity at a specific point in time.

After Adjustments

Refers to figures or financial statements that have been modified to reflect changes or corrections to initial entries or accounts.