Ezra, an Accountant, Intentionally Misstates a Material Fact to Mislead

question 2

Multiple Choice

Ezra, an accountant, intentionally misstates a material fact to mislead Fruit Packing Inc., a client. Fruit Packing justifiably relies on the misstatement to its detriment. Ezra is most likely liable for

• A)actual fraud.
• B)constructive fraud.
• C)destructive fraud.
• D)virtual fraud.

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Definitions:

Corporate Profit

The financial surplus gained by a corporation after deducting all costs, taxes, and expenses from revenue.

Physical Capital

The stock of tangible goods like machinery, buildings, and infrastructure that are used in production.

Human Capital

Represents the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.

Financial Capital

The funds provided by lenders (and investors) to businesses to purchase real capital equipment for producing goods/services.