ch 32 - Sheet1 Page 1 Chapter 32 Liability to Third Parties...

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Unformatted text preview: Sheet1 Page 1 Chapter 32 Liability to Third Parties and Termination TRUE/FALSE QUESTIONS A1. Express authority is authority declared in clear, direct, definite terms. ANSWER: T PAGE: 653 TYPE: N NAT: AACSB Analytic AICPA Legal B1. The equal dignity rule does not apply to a corporate officer who, in an ordinary business situation, acts on behalf of his or her firm. ANSWER: T PAGE: 653 TYPE: = NAT: AACSB Analytic AICPA Legal A2. An agents authority must be implied for the agents act to bind a principal. ANSWER: F PAGE: 653 TYPE: = NAT: AACSB Analytic AICPA Legal B2. A power of attorney may be created orally. ANSWER: F PAGE: 653 TYPE: = NAT: AACSB Analytic AICPA Legal A3. A power of attorney is a written document. ANSWER: T PAGE: 653 TYPE: = NAT: AACSB Reflective AICPA Critical Thinking TEST BANK AUNIT SEVEN: AGENCY AND EMPLOYMENT B3. A power of attorney can be given only to an actual attorney. ANSWER: F PAGE: 653 TYPE: = NAT: AACSB Analytic Sheet1 Page 2 AICPA Legal A4. A power of attorney can be given only to an actual attorney. ANSWER: F PAGE: 653 TYPE: + NAT: AACSB Analytic AICPA Legal B4. A principals liability in a contract with a third party may arise from the authority given to the agent to enter into the contract. ANSWER: T PAGE: 653 TYPE: = NAT: AACSB Analytic AICPA Legal A5. An agents authority to act on behalf of a principal derives exclusively from the agents express authority. ANSWER: F PAGE: 654 TYPE: = NAT: AACSB Analytic AICPA Legal B5. An agents authority must be express for the agents act to bind a principal. ANSWER: F PAGE: 654 TYPE: = NAT: AACSB Analytic AICPA Legal A6. For an agents implied authority to be effective, a principal must confirm it in writing. ANSWER: F PAGE: 654 TYPE: N NAT: AACSB Analytic AICPA Legal CHAPTER 32: LIABILITY TO THIRD PARTIES AND TERMINATION B6. An agents implied authority may be conferred by contradiction. ANSWER: F PAGE: 654 TYPE: N NAT: AACSB Analytic AICPA Legal A7. In considering the scope of an agents implied authority, the test is whether the agent reasonably believed that he or she ANSWER: T Sheet1 Page 3 PAGE: 654 TYPE: = NAT: AACSB Analytic AICPA Legal B7. An agents authority to act on behalf of a principal derives exclusively from the agents express or implied authority. ANSWER: F PAGE: 655 TYPE: + NAT: AACSB Analytic AICPA Legal A8. Apparent authority exists if a principal causes a third party to believe reasonably that an agent has authority to act. ANSWER: T PAGE: 655 TYPE: = NAT: AACSB Analytic AICPA Legal B8. A partially disclosed principal is one whose first, but not last, name is known by a third party with whom an agent contracts ANSWER: F PAGE: 657 TYPE: N NAT: AACSB Analytic AICPA Legal A9. Before a principal can ratify a contract, the agent must withdraw from the deal....
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ch 32 - Sheet1 Page 1 Chapter 32 Liability to Third Parties...

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