An Employer Is Held Liable for Damages Caused by an Accident

question 3

Multiple Choice

An employer is held liable for damages caused by an accident involving an employee driving the company car on company business. Identify the law underlying this decision.

• A)The doctrine of caveat emptor
• B)The doctrine of respondent superior
• C)Implied warranty of merchantability
• D)The doctrine of caveat lector

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Definitions:

Other Income

Income derived from sources other than a company's primary business operations, such as interest or rental income.

Revenue

The total amount of money received by a company for goods sold or services provided during a certain period.

Record Payments

The process of documenting all money transfers made to settle debts or for purchases in the accounting records of a company.

Perpetual Inventory Method

An accounting method for maintaining continuous records of inventory balances, with updates made for each purchase and sale transaction.