If an Accountant Negligently Provides Advice to a Client and That

question 12

Multiple Choice

If an accountant negligently provides advice to a client and that client suffers economic loss as a result, what type of insurance will cover the damages that the accountant will be required to pay?

• A)Public liability insurance
• B)Negligent advice insurance
• C)Professional indemnity insurance
• D)Tort insurance

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Definitions:

Medicare & Medicaid

Federal programs in the United States that provide health coverage; Medicare serves older adults and some younger disabled individuals, while Medicaid assists low-income people.

Progressive Tax Structure

A tax system in which the tax rate increases as the taxable amount or income increases, placing a heavier burden on those who can afford to pay more.

Marginal Tax Rate

The rate at which an additional dollar of income is taxed.

Vertical Equity

A principle in taxation that says taxpayers with a higher ability to pay should contribute more in taxes.