Most States,as Well as the Revised Act,hold That the Test

question 44

Multiple Choice

Most states,as well as the Revised Act,hold that the test for the duty of diligence requires a director or officer to discharge corporate duties:

• A)in good faith.
• B)with a high degree of care.
• C)without a conflict of interest.
• D)through a named attorney or legal firm.
• E)All of the above.

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Definitions:

Gross Method

An accounting method for recording purchases at the gross invoice amount before deducting any cash discounts.

Defective Merchandise

Products that are found to have flaws or faults which impair their functionality, appearance, or intended use.

Periodic Inventory System

An inventory system that updates inventory and cost of goods sold records at the end of an accounting period.