Which of the Following Statements Is True with Respect to the Law

question 165

Multiple Choice

Which of the following statements is true with respect to the law of damages?

• A)Damages are awarded for a breach of a condition but not for a breach of warranty.
• B)If a contract contains a liquidated damages clause,the party who has breached the contract has agreed to pay to the party wronged an amount equal to all the loss that directly and naturally flows from the breach.
• C)Damages are an order from the court for the breaching party to perform the contract as he or she agreed to do.
• D)Damages are intended to punish the wrongdoer for breaching the contract.
• E)A deposit is an amount of money a party to a contract agrees to forfeit if he or she breaches the contract.

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Definitions:

Note Receivable

A financial document representing a borrower's promise to pay back a specified amount of money plus interest to a lender at a future date.

Allowance for Doubtful Accounts

An accounting provision representing the estimate of uncollectable accounts receivable.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Accounts Receivable Turnover

The relationship between net sales and accounts receivable, computed by dividing the net sales by the average net accounts receivable; measures how frequently during the year the accounts receivable are being converted to cash.