Which Statement Accurately Describes the Liability of Accountants Under the Law

question 23

Multiple Choice

Which statement accurately describes the liability of accountants under the law of Canada?

• A) Canadian law is well settled in relation to an accountant's liability to nonclients.
• B) Canadian law does not recognize liability of an auditor in relation to a prospectus distributed with the auditor's filed consent by an issuer of securities containing misrepresentations.
• C) Canadian law does not recognize liability on the part of an auditor for misrepresentations made in secondary-market disclosures made with the auditors' written consent.
• D) As in the U.S., in Canada the common law holds accountants liable for negligence to clients.
• E) In Quebec alone, accountants may not be held liable even if a causal link between fault and damage is established.

Understand various inventory costing methods and their effects on financial statements.

Analyze the impact of inventory errors on financial reporting.

Calculate inventory balances, cost of goods sold, and inventory turnover metrics.

Determine the effects of inventory management decisions on business liquidity and profitability.

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Definitions:

Prepayment

Payment made for goods or services before they are received or required.

Discounting

The process of determining the present value of a payment or a series of payments that will be made in the future.

Maturity Value

The amount payable to the investor at the end of a debt instrument's holding period or term.

Compounded Monthly

interest earned or paid is calculated and added to the account balance every month.