Failure to Record a Liability Will Probably

question 100

Multiple Choice

Failure to record a liability will probably

• A) result in an overstated net income.
• B) result in overstated total liabilities and owner's equity.
• C) have no effect on net income.
• D) result in understated total assets.

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Definitions:

Comparative Negligence

A legal principle under which the fault for an accident is divided among all parties involved based on the degree of responsibility of each party.

Pure Comparative

A legal principle of negligence law allowing a plaintiff to recover a percentage of damages even if they are partially at fault, with compensation reduced by their percentage of fault.

Modified Comparative

A legal doctrine used in some jurisdictions for determining damages and liability based on the degree of fault of each party.

Assumption Of Risk

A legal doctrine that a person may not recover for an injury received when they voluntarily expose themselves to a known danger.