Which of the Following Statements Best Differentiates Compensatory and Punitive

question 15

Multiple Choice

Which of the following statements best differentiates compensatory and punitive damages in civil litigation?

• A) Compensatory damages are meant to reward a plaintiff, while punitive damages are meant to reward a defendant.
• B) Compensatory damages are meant to compensate a plaintiff's loss, while punitive damages are meant to deter similar misconduct by the same defendant or other parties in the future.
• C) Compensatory damages are meant to reward a defendant, while punitive damages are meant to punish a claimant.
• D) Compensatory damages are benefit streams the plaintiff would have received if not for the injury, while punitive damages are the benefit streams the plaintiff will receive for future damages.

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Definitions:

Inventories

Quantities of goods that are held by a company for the purpose of resale or production.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for non-cash transactions and changes in working capital to arrive at operating cash flow.

Accounts Receivable

Funds that clients or customers owe to a company for products or services delivered but not yet compensated for.

Accounts Payable

Liabilities of a business that are due to suppliers and creditors within the short term, typically less than a year.