Direct Damages Are Also Known As

question 43

Multiple Choice

Direct damages are also known as:

• A) consequential damages.
• B) compensatory damages.
• C) both consequential and compensatory damages.
• D) liquidated damages.

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Definitions:

Prepaid Insurance

An asset account that represents insurance payments made in advance for future coverage periods.

Insurance Premium

The amount of money an individual or business must pay for an insurance policy, which provides financial protection or reimbursement against losses.

Adjusting Entry

Log entries drafted at the final phase of a financial period to attribute income and expenses to the period in which they were truly incurred.

Reversing Entries

Entries recorded at the start of a new accounting cycle to negate or reverse adjustments that were documented at the conclusion of the preceding period.