Ch31-TB1-WBL-10e

Ch31-TB1-WBL-10e - Chapter31 AgencyFormationandDuties

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Chapter 31 Agency Formation and Duties N.B.:   TYPE  indicates that a question is new, modified, or unchanged, as  follows. N A question  new  to this edition of the Test Bank. + A question  modified  from the previous edition of the Test Bank, = A question  included  in the previous edition of the Test Bank. TRUE/FALSE QUESTIONS 1. An agency relationship is a fiduciary relationship. ANSWER: T PAGE: 636 TYPE: N 2. An officer of a corporation cannot possess the power to bind the corporation. ANSWER: F PAGE: 636 TYPE: = 3. An employee may act in the capacity of an agent. ANSWER: T PAGE: 636 TYPE: = 4. All employment laws apply to independent contractors. ANSWER: F PAGE: 637 TYPE: + 5. Agency relationships do not exist outside employment relationships. ANSWER: F PAGE: 637 TYPE: = 57
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58 TEST BANK 1—UNIT SEVEN: AGENCY AND EMPLOYMENT 6. An independent contractor’s physical conduct is controlled, or subject to  control, by his or her employer. ANSWER: F PAGE: 637 TYPE: =
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CHAPTER 31: AGENCY FORMATION AND DUTIES 59 7. Building contractors and subcontractors are not independent contractors. ANSWER: F PAGE: 637 TYPE: = 8. An agent whose employer does not have the right to control the agent’s  performance is an independent contractor. ANSWER: T PAGE: 637 TYPE: = 9. An agency relationship can be formed only in writing. ANSWER: F PAGE: 641 TYPE: + 10. A minor can be an agent. ANSWER: T PAGE: 641 TYPE: + 11. There does not need to be a written agreement between two parties to cre- ate an agency relationship. ANSWER: T PAGE: 641 TYPE: = 12. A principal may deny the existence of an agency relationship whenever it  suits his or her purpose. ANSWER: F PAGE: 642 TYPE: = 13. An agent owes his or her principal a duty to act in good faith. ANSWER: T PAGE: 643 TYPE: = 14. A principal owes his or her agent a duty to act in good faith. ANSWER: T PAGE: 643 TYPE: = 15. An agent must use reasonable diligence and skill in acting on behalf of his  or her principal. ANSWER: T PAGE: 643 TYPE: + 16. Information acquired  through  an agency  relationship  is not  considered  confidential.
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60 TEST BANK 1—UNIT SEVEN: AGENCY AND EMPLOYMENT ANSWER: F PAGE: 643 TYPE: N 17. An agent must maintain separate accounts for the principal’s funds and the  agent’s personal funds. ANSWER: T PAGE: 645 TYPE: N 18. Generally, a principal has a duty to pay an agent for services rendered. ANSWER: T PAGE: 646 TYPE: N 19. A principal has a duty to cooperate with the agent. ANSWER:
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This note was uploaded on 10/15/2010 for the course ACCT ACCT40 taught by Professor Birnbaum during the Fall '08 term at CUNY Brooklyn.

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Ch31-TB1-WBL-10e - Chapter31 AgencyFormationandDuties

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