In Storetrax

question 332

Multiple Choice

In Storetrax.com v. Gurland, where Gurland, the founder of Storetrax.com, was removed as president but denied severance pay and sued for that, the appeals court held that he was:

• A) not allowed to sue the company because he was on the board of directors
• B) not protected by "safe harbor" because he failed to give the company sufficient notification of the imminence of a lawsuit
• C) protected by "sufficient notification" because he gave the company sufficient notification of the imminence of a lawsuit
• D) not by "sufficient notification" because he failed to give the company sufficient notification of the imminence of a lawsuit
• E) none of the other choices are correct

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Definitions:

Reversing Entries

Journal entries made at the beginning of an accounting period to negate or reverse certain adjusting entries made in the previous period for simplification.

Adjusting Entries

Adjusting entries are journal entries made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Unearned Rent

Income received for rent that has not yet been earned because the rental period has not taken place. It is recorded as a liability until the rent is earned.

Office Salaries Payable

This term refers to the obligation or amounts due to office employees for wages earned but not yet disbursed by the company.