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2 years ago

When courts find accountants liable for constructive fraud, the implication is that:______.

Business

1 answer:

barxatty [35]2 years ago

7 0

Even if they were unaware of the fraud, accountants may be held accountable for it.

<h3>How does constructive fraud work?</h3>

A legal fable known as "constructive fraud" describes a circumstance in which a person or organization obtained an unfair advantage over another using dishonest or unjust means. As opposed to true fraud, no proof of intent is required. The failure to inform clients of product flaws is one example of unfair practices.

The elements are:

1) a duty owed by the party to be charged to the complaining party due to their relationship;

2) violation of that duty by making deceptive material misrepresentations of past or current facts or remaining silent when a duty to speak exists; and

3) reliance on such statements by the complaining party.

To know more about fraud visit:

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Effect of Inventory Errors

pav-90 [236]

Answer:

Effect of Inventory Errors

1. Kate Interiors Company:

Ending Inventory of $378,500 counted as $366,900.

This shows that Ending inventory is undervalued by $11,600 ($378,500 - 366,900).

The cost of goods sold will be overstated by $11,600 and the net income understated by $11,600 in the income statement.

In the balance sheet, the assets are understated by $11,600 and Equity (Retained Earnings) understated by the same amount.

2. Waterjet Bath Company:

Ending Inventory of $719,880 counted as $728,660.

This shows that Ending inventory is overvalued by $8,780 ($728,660 - 719,880).

The cost of goods sold will be understated by $8,780 and the net income overstated by $8,780 in the income statement.

In the balance sheet, the assets are overstated by $8,780 and the Equity (Retained Earnings) overstated by $8,780.

Explanation:

An overstatement of Ending inventory results in understated cost of goods sold and overstated net income. Conversely, an understatement of ending inventory results in overstated cost of goods sold and understated net income.

7 0

3 years ago

The Inferior Goods Co. stock is expected to earn 13% in a recession, 7% in a normal economy, and lose 6% in a booming economy. T

Natalka [10]

Answer:

Ans. The expected rate of return on the Inferior Goods Co. stock is 5.90%

Explanation:

Hi, you just have to multiply the expected earnings by the probability of occurance of a certain event and then add up all the products. Here is the information all organized to be processed.

Item Prob Earn

Booming 20% -6%

Normal 55% 7%

Recession 25% 13%

Ok, now let´s calculate the expected rate of return.

$ExpectedReturn=(0.2*(-0.06))+(0.55*0.07)+(0.25*0.13)$

$ExpectedReturn=-0.012+0.039+0.033=0.059$

So the expected rate of return of the stock is 5.90%

Best of luck.

8 0

3 years ago

Asher buys a linen suit from Miriam and gives it to his father, Moises. Moises takes the suit to Vanessa, who runs a local dry c

andrezito [222]

This doesn’t even make any sense

7 0

3 years ago

Which of the following statements is true? a. A college degree does not influence the earnings of workers. b. The median pay of

ICE Princess25 [194]

Answer:

b. The median pay of economics majors increased more in dollar terms than any other majors in 2015.

Explanation:

As it can be seen from the various sources that tha major in economics represents the largest per dollar rise for all major in the year 2015

Due to which it brings down the requirement for more economists also the word economics is not certain. Also, for the entry level jobs in the economics field, the minimum qualification should be masters

Therefore according to the given case, the option B is correct

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3 years ago

Kwik taxi service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven

zimovet [89]

Answer:

Explanation:

Depreciation cost :

2016: expected useful life

Cost - salvage value X usage

= 140,000

24,300-700

=5.93*28,000 = $166,101.69

2017: expected useful life

Cost - salvage value X usage

= 140,000

24,300-700

=5.93*33,000 = $195,762.71

Depreciation Expense:

2016: (cost-salvage value)*actual activity performed

total estimated useful life

= (24,300-700)*28,000

140,000

=$4,720

2017: (cost-salvage value)*actual activity performed

total estimated useful life

= (24,300-700)*33,000

140,000

=$5,562.86

6 0

3 years ago