TJ_Comp 20_TB_Ch37

TJ_Comp 20_TB_Ch37 - Chapter 37AGENCY TRUE/FALSE 1. Through...

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Unformatted text preview: Chapter 37AGENCY TRUE/FALSE 1. Through agency, one person can make contracts at numerous places with many different parties at the same time. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 2. An agent is authorized to make contracts for, and is under the control of, the principal. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 3. Agency is a relationship by which the principal is authorized to act on behalf of an agent in negotiating and making contracts with third persons. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 4. An agent is distinguished from an ordinary employee in that employees are hired to represent the em- ployer in dealings with third persons. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 5. The employer of an independent contractor does not have control over the performance of the work by the independent contractor. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 6. A principal usually directs and controls the actual performance of an independent contractor's work. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 7. If a principal is a minor and the agent is an adult, the agent can only create a voidable contract on be- half of the principal. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 8. Lynn is the general manager of the Neponset River Farm Ice Cream Company and is responsible for all aspects of the company's operations. She is a universal agent. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 9. An agency may be created to perform almost any act that a principal could lawfully do. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 10. Agents who are minors cannot enter into valid contracts on behalf of an adult principal. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 11. A written authorization of agency is called a power of attorney. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 12. An agency contract may be created by the oral appointment of an agent. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 13. The term apparent authority is used when an appearance of authority has been created by a principal, but actual authority does not exist. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 14. A principal may ratify an unauthorized contract of an agent. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 15. The intention to ratify an unauthorized act may be expressed by words or conduct. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 16. For a principal to ratify the actions of an agent, all that is necessary is that the principal express the in- tention to ratify. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 17. A principal may ratify an action taken by an agent that the principal would not have been capable of authorizing at the time that the action was taken....
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This note was uploaded on 02/22/2012 for the course BUS BUS212 taught by Professor Manney during the Spring '12 term at FSU.

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TJ_Comp 20_TB_Ch37 - Chapter 37AGENCY TRUE/FALSE 1. Through...

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