When an Accountant Negligently Prepares a Financial Statement Knowing That

question 32

Multiple Choice

When an accountant negligently prepares a financial statement knowing that the client intends to use it in obtaining a loan from a bank, the accountant will be liable to whichever lender actually makes the loan under the __________rule.

• A) known user
• B) contact
• C) foreseeable user.
• D) privity

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Definitions:

Weather

The state of the atmosphere at a particular place and time, including temperature, precipitation, humidity, and wind.

Limestone

A sedimentary rock primarily comprising calcium carbonate (CaCO3), often formed from the skeletal remains of marine organisms.

Oceans Salty

The condition of seawater having high concentrations of dissolved salts, primarily sodium chloride, resulting from processes such as rock weathering and volcanic activity.

Chemical Elements

Substances consisting of atoms which have the same number of protons in their atomic nuclei, representing the simplest forms of matter that cannot be broken down using chemical reactions.