Under the Concept of Strict Liability, The

question 11

Multiple Choice

Under the concept of strict liability, the:

• A) buyer is unjustified to depend on the seller being right.
• B) seller of an item is required to make an implied warranty rather than an express warranty.
• C) seller of an item has the responsibility for not putting a defective product on the market.
• D) buyer needs to prove that there was direct sale from the manufacturer.

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Definitions:

Statement of Cash Flows

A financial report that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Operating Activities

Activities that relate directly to the operations of a company, including cash flows from selling goods and services.

Indirect Method

A method for preparing the cash flow statement where net income is adjusted for changes in balance sheet items to calculate cash flow from operating activities.

Depreciation Expense

This is the systematic allocation of the cost of a tangible asset over its useful life.