Fact Pattern 14-A1 (Questions A2-A3 Apply)

question 39

Multiple Choice

Fact Pattern 14-A1 (Questions A2-A3 apply)
Linea,an employee of Hard Labor Industries (HLI) ,is injured in a work-related accident.Based on the diagnosis of Newt,a doctor,Linea accepts $50,000 from HLI and waives the right to future claims.Newt's diagnosis later proves to have been wrong.
-Refer to Fact Pattern 14-A1.In terms of the impact on Linea's agreement with HLI,Newt's misdiagnosis is

• A)a mistake of fact.
• B)an expert's puffery.
• C)innocent misrepresentation.
• D)negligent misrepresentation.

Comprehend the adjustment process for unearned revenues.

Understand how to calculate and record depreciation expense using the straight-line method.

Grasp the impact of failing to record adjusting entries on financial statements.

Learn to prepare adjusting entries for accrued expenses and understand their impact.

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