Joe Entered a Store and Approached a Display of China

question 68

Multiple Choice

Joe entered a store and approached a display of china. He was examining an extremely valuable vase and carelessly dropped it, destroying it. Which of the following is correct with respect to his liability?

• A) If the store has insurance coverage, the insurance will cover his careless conduct and he doesn't have to worry about anything.
• B) If the store has insurance coverage, the insurance will pay the store for the loss but may pursue Joe for repayment by suing him for negligence.
• C) Joe cannot be sued for the loss because Joe is not a party to the insurance contract.
• D) If the store does not have insurance coverage, they should have and so Joe has no responsibility in these circumstances.
• E) Joe is responsible only if the store has no insurance coverage.

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Definitions:

Acquisition Date

The specific date on which control of the assets of an acquired company is transferred to the buyer.

Deferred Tax Item

A financial item on the balance sheet that arises due to timing differences between the recognition of income and expenses for accounting and tax purposes.

Goodwill

An intangible asset that arises when a business is purchased for more than the fair value of its separate net assets.

Recognition

The process of capturing for inclusion in the statement of financial position or statement of profit or loss and other comprehensive income an item that meets the definition of one of the elements of financial statements—an asset, a liability, equity, income, or expenses.