Case Brief 3

question 11

Multiple Choice

Case Brief 3.2 discussed the Supreme Court of Canada's decision in Non-Marine Underwriters, Lloyd's of London v Scalera.Which of the following statements is TRUE?

• A)The court's decision focused on the concept of vicarious liability.
• B)The court held that tort law's compensatory function prohibits an employer from relying upon a liability insurance policy in a case of vicarious liability.
• C)The court held that an employer may be held vicariously liable for the torts of an independent contractor.
• D)The court held that an insurance company is entitled to rely on a term in a liability insurance policy that denies coverage if the policy holder committed a tort with the intention of causing harm.
• E)The court held that a liability insurance policy causes the insurance company to be held vicariously liable for the policy holder's torts.

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Definitions:

Estimating Inventories

The process of approximating the quantity and value of inventory a business has on hand.

Gross Profit Method

A technique to estimate inventory cost by using the gross profit margin, often used when physical inventory counts are impractical.

Financial Statement Effects

The impact of transactions on the financial statements, affecting the balance sheet, income statement, and cash flow statement.

Ending Inventory Overstatement

This occurs when the reported amount of inventory at the end of a period is higher than its actual value, which can distort financial statements.