Jared Drives His Car Knowing That the Brakes Are Defective

question 42

True/False

Jared drives his car knowing that the brakes are defective and has an accident in which the car is damaged and he is injured. He will likely be unable to recover from the manufacturer, because he voluntarily assumed the risk of the defective brakes.

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Definitions:

Outstanding Checks

Checks that have been written and recorded in the payer's accounting records but have not yet been cashed or deposited by the payee.

Petty Cash

A modest sum of money maintained in reserve for small, unplanned costs.

Journal Entry

A record in the accounting journal that represents a transaction and shows the debits and credits to various accounts.

Petty Cash Account

A small fund kept on hand for minor, incidental expenses.