Which of the Following Was the Result on Appeal in the Case

question 62

Multiple Choice

Which of the following was the result on appeal in the Case Opener in which the plaintiff optometrist sued the defending bank for cashing over 500 checks that his receptionist fraudulently embezzled through forging his signature?

• A) Because both the plaintiff and the bank were found negligent, the plaintiff was denied recovery.
• B) Because only the bank was found negligent, the plaintiff was denied recovery.
• C) Because both the plaintiff and the bank were found negligent, the plaintiff recovered only 50% of his losses.
• D) Because only the bank was found negligent, the plaintiff was entitled to recover the value of the checks.
• E) Based on public policy, the plaintiff was denied recovery although no negligence was found on the part of either party.

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Definitions:

Expense Recognition Principle

An accounting principle that expenses should be recognized and recorded at the time they are incurred, not necessarily when cash is paid.

Recognition Principle

An accounting concept dictating that revenue should be recognized in the income statement when it is realized or realizable and earned, not necessarily when cash is received.

Time Period Principle

An accounting principle stating that financial reporting should be done in regular intervals to ensure relevance and reliability.

Contra Account

An account used in an accounting system to offset a related account, commonly used to record depreciation, allowances, and discounts.