Lou, an Attorney, Allows a Statute of Limitations to Lapse

question 31

Multiple Choice

Lou, an attorney, allows a statute of limitations to lapse on a claim by Metal Fabrication Company, a client. Lou

• A)can be held liable for malpractice.
• B)has violated an ethical standard but cannot be held liable.
• C)is subject to criminal penalties under the statute of limitations.
• D)will be automatically disbarred.

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Definitions:

General Journal

A primary accounting record where financial transactions are entered before posting to specific accounts in the general ledger.

Sales Account

An account used to record the revenue from sales of goods or services by a company during a specific period.

Credit

A journal entry that results in an increase in a liability or equity account or a reduction in an asset or expense account.

Overstated

Describing financial statements or figures that have been reported at a value higher than the true or fair value.