Which of the Following Standards Is Used in Applying the Reasonably

question 6

Multiple Choice

Which of the following standards is used in applying the reasonably foreseeable users test regarding accountant liability to third parties?

• A) Strict product liability
• B) Negligence
• C) Fraud
• D) Breach of contract
• E) Privity

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Definitions:

Cost of Goods Sold

Expenses directly linked to manufacturing goods for sale, covering both the cost of materials used and the wages for labor.

Closing Process

The year-end procedure used in accounting to transfer balances from temporary accounts to permanent accounts, preparing the books for the next fiscal period.

Selling Expenses

Costs incurred directly and indirectly in making sales, including advertising, commissions, and salaries of sales staff.

Human Resource Management

The strategic approach to the effective management of people in a company or organization in a way that helps their business gain a competitive advantage.