Accounting 215 Test Three

Accounting 215 Test Three - Accounting 215 Test 3...

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Accounting 215 Test 3 Originally given Fall 2001 True/ False 1. In a standard principal-agent relationship, the principal has the right to control the actions of the agent. True 2. In general, there must be a written agreement between a principal and an agent to create an agency relationship. False 3. A minor can be an agent but cannot normally be a principal appointing an agent. True 4. An agent who does not use reasonable diligence and skill in acting on behalf of his or her principal may be liable for breaching his or her duty of performance. True 5. A principal is not ordinarily required to indemnify an agent for liabilities incurred because of authorized and lawful acts and transactions by the agent. False 6. The failure of a principal to repudiate promptly an unauthorized transaction by an agent is a ratification of the transaction. True 7. Apparent authority exists if a principal causes a third party to believe reasonably that an agent has authority to act, even if the agent does not. True 8. If a principal ratifies an agent’s unauthorized contract, the contract is viewed as having been authorized by the principal from the outset. True 9. At common law, employers were held strictly liable for the acts of their employees no matter how carefully they supervised their employees’ actions. True 10. If an action is ethical from an outcome-based perspective, it is ethical from a duty-based perspective. False 11. There is an ethical component to virtually every key decision a business firm makes. True 12. Where a bailment is created for the sole benefit of the bailee, the bailor owes the highest duty of care. False 13. Right-to-work laws make it illegal for employers to discriminate in their hiring practices on the basis of race, color, sex, national origin, religion, or age. False
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14. An employer can require an employee to take a lie-detector test when investigating losses attributed to theft. True 15. Administrative law consists of the rules, orders, and decisions of administrative agencies. True 16. A Noise Control Action imposes standards on total workplace noise levels. False 17. A key feature distinguishing a joint tenancy in common is that only two persons can hold property in joint tenancy, whereas an unlimited number of persons can hold property as tenants in common. False 18. An administrative law judge decides both questions of law and fact. True 19. The primary purpose of the Environmental Protection Agency is to coordinate and administer federal environmental policies and statutes. True 20. The Fair Labor Standards Act covers all employers engaged in the interstate commerce, except those who employ children. False 21. Enabling legislation is passed before an administrative agency begins any regulatory activities. True 22. Federal statutes provide the basis for issuing regulations to control air pollution. True
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This note was uploaded on 09/19/2011 for the course ACCT 215 taught by Professor Curtis during the Spring '08 term at Iowa State.

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Accounting 215 Test Three - Accounting 215 Test 3...

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