Claire Has Been Selling Her Famous Cookies on Her Own

question 142

Multiple Choice

Claire has been selling her famous cookies on her own to local bakeries. Her cookies are so popular that she needs to hire someone as an employee to help with the packaging and delivery. Claire has taken no formal steps regarding the form of business organization. Which of the following is true about Claire's situation?

• A) Claire is unable to legally hire an employee until she takes steps to incorporate.
• B) Claire will be vicariously liable for the torts of her employee committed during the course of employment.
• C) The employee that Claire hires will be, in law, a partner in Claire's business.
• D) The employee that Claire hires will be liable for torts Claire commits during the course of the business.
• E) Claire's liability is limited to the value of the cookie business.

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Definitions:

Cash Payments Journal

A bookkeeping ledger in which cash payments are recorded, showing outflows of cash.

Office Supplies

Items used in an office for daily operations, including stationary, paper, and other consumables.

Computerized Accounting System

A software system that facilitates the management of financial transactions and accounting tasks, streamlining processes such as ledger maintenance, journal entries, and financial statement generation.

Special Journals

Accounting journals designed for recording specific types of transactions in a detailed manner, such as sales or purchases.