ACCT 432 Ch 10 Exam Review

In order for damages to be assessed, the court must find:

• There is liability in the case.

• One of the parties is really bad.

• Criminal violations have occurred.

• There is both a liability and criminal violations have occured.

Jim Company sold assets to Fred Company with an alleged value of $2,400,000. Jim Company paid $2,100,000 for the assets. The actual value of the assets was $1,700,000. Using the "out-of-pocket" damage loss rule, the fraud damages would be:

• $1,700,000.

• $2,400,000.

• $700,000

• $400,000

Rebuttal testimony occurs during the:

• Discovery phase of the case.

• Trial stage of the case.

• Initial pleadings in the case.

• Closing arguments in the case.

Deposition testimony:

• Is given under oath.

• Is taken during the discovery period of the case.

• All of these

• None of these

Daubert requirements:

• Are used exclusively in state courts.

• Were created to ensure quality expert testimony in federal courts.

• Relate to scientific experts but not to financial experts in cases.

• Have little impact on cases.

In tort cases, damages are determined based on the concept that:

• There was no liability, only damages.

• The plaintiff in the case should be placed in a position economically equivalent to that absent the harm from the tort.

• All relevant costs resulting from the breach of contract should be included.

• Only the incremental revenues resulting from the tort should be included.

A summary judgment is:

• Rendered at the end of the case after the judge/jury has heard and summarized all of the case testimony.

• A seldom used trial technique in which an attorney attempts to summarize the case data as part of closing arguments.

• An attempt by one or both sides in a case to ask the judge to accept their arguments in the case as correct and to render an opinion in the case in their favor without even going to trial.

• A period technique used during the discovery phase of the case to periodically summarize the issues that have been present in the case.

A Voir Dire challenge to an expert witness’s testimony refers to:

• A process of discrediting an opposing expert witness that is used in federal court but not in state courts.

• A legal brief filed during discovery to discredit an opposing expert’s education.

• A process of discrediting an opposing expert witness that is no longer used since the use of the Daubert challenge.

• The opposing attorney’s questioning of the expert’s credentials, knowledge, or experience in relation to the case.

When accounting expert witnesses develops a theoretical framework for their damage estimates the primary reason is

• It provides a logical conceptual structure for the damage calculations.

• It gives the expert a foundation to support and explain the damage calculations to the court.

• Some judges request/require experts to provide such information.

• All of the answers are correct.

The accounting concept that is used most often in developing damages in a law suit is

• the framework for a cost reconstruction system.

• the nature and timing of repair and maintenance capitalization versus expensing.

• the use of cost behavior, fixed, variable, and mixed costs.

• allocated costs and the appropriate allocation base.