Which of the Following Statements Is TRUE with Respect to Misrepresentations

question 62

Multiple Choice

Which of the following statements is TRUE with respect to misrepresentations?

• A)An innocent misrepresentation may trigger an award of damages.
• B)A fraudulent misrepresentation may trigger rescission but not damages.
• C)A negligent misrepresentation may trigger damages but not rescission.
• D)An innocent misrepresentation may be rescinded.
• E)A pre-contractual misrepresentation may trigger relief in contract but not relief in tort.

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Definitions:

IFRS

International Financial Reporting Standards, a set of accounting guidelines that dictate how financial statements should be reported around the world.

Realized and Unrealized Gains

Profits made from the sale of assets (realized gains) versus increases in the value of assets still held (unrealized gains).

Entity Approach

A method in accounting that treats a business as separate from its owners or stakeholders for reporting and evaluation purposes.

Consolidated Balance

A financial statement that presents the total assets, liabilities, and equity of a parent company and its subsidiaries as if they are a single entity.