What Was the Main Rule That Was Established in Gilford

question 5

Multiple Choice

What was the main rule that was established in Gilford Motors v Horne (1933) ?

• A)The corporate veil can be lifted if the company was used as a 'sham' to breach a contract.
• B)A person who was the main shareholder and director of a company could also be an employee of the company.
• C)A director who takes no part in the daily business of the company may be liable for debts it incurs when it was insolvent.
• D)A company is separate from the person who controls it.

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing a more accurate reflection of the costs associated with producing specific products or services.

Activity Cost Pools

A method in managerial accounting used to allocate indirect costs to products or services based on specific activities that drive costs.

Activity-Based Costing

An accounting method that identifies the activities a firm performs and assigns costs to products and services based on the actual consumption of resources.

Total Overhead Cost

The sum of all indirect costs of manufacturing or providing services that are not directly tied to a specific product or job.