chp16 - Chapter 16 Agency TRUE/FALSE QUESTIONS 1.

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Chapter 16 Agency TRUE/FALSE QUESTIONS 1. An officer of a corporation cannot possess the power to bind the corporation. ANSWER: F PAGE: 533 TYPE: N NAT: AACSB Analytic AICPA Legal 2. An employee may act in the capacity of an agent. ANSWER: T PAGE: 534 TYPE: + NAT: AACSB Analytic AICPA Legal 3. An agent whose employer does   not   have the right to control the agent’s  performance is an independent contractor. ANSWER: T PAGE: 534 TYPE: N NAT: AACSB Reflective AICPA Legal 4. An independent contractor always acts in the capacity of an agent. ANSWER: F PAGE: 534 TYPE: + NAT: AACSB Analytic AICPA Legal 5. A minor can be an agent. ANSWER: T PAGE: 537 TYPE: N NAT: AACSB Analytic AICPA Legal 6. A principal may deny the existence of an agency relationship whenever it  suits his or her purpose. 11
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12           UNIT THREE:  BUSINESS AND EMPLOYMENT ANSWER: F PAGE: 538 TYPE: N NAT: AACSB Analytic AICPA Legal 7. An agency agreement must be in writing. ANSWER: F PAGE: 538 TYPE: + NAT: AACSB Analytic AICPA Legal 8. An agency agreement can be implied by conduct. ANSWER: T PAGE: 538 TYPE: N NAT: AACSB Analytic AICPA Legal 9. An agency relationship is a fiduciary relationship. ANSWER: T PAGE: 540 TYPE: = NAT: AACSB Analytic AICPA Legal 10. An agent owes his or her principal a duty to act in good faith. ANSWER: T PAGE: 540 TYPE: N NAT: AACSB Analytic AICPA Legal 11. A principal owes his or her agent a duty to act in good faith. ANSWER: T PAGE: 540 TYPE: N NAT: AACSB Analytic AICPA Legal 12. An agent must use reasonable diligence and skill in acting on behalf of his  or her principal. ANSWER: T PAGE: 541 TYPE: = NAT: AACSB Analytic AICPA Legal 13. An agent must maintain separate accounts for the principal’s funds and the  agent’s personal funds. ANSWER: T PAGE: 543 TYPE: = NAT: AACSB Analytic AICPA Legal 14. Generally, a principal has a duty to pay an agent for services rendered.
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CHAPTER 16:  AGENCY           13 ANSWER: T PAGE: 543 TYPE: = NAT: AACSB Analytic AICPA Legal 15. A principal must indemnify an agent for liability due to authorized acts by  the agent. ANSWER: T PAGE: 543 TYPE: N NAT: AACSB Analytic AICPA Legal
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14           UNIT THREE:  BUSINESS AND EMPLOYMENT 16. A principal has a duty to cooperate with the agent. ANSWER: T PAGE: 544 TYPE: = NAT: AACSB Analytic AICPA Legal 17. If a contract is in writing, the agent’s authority to perform the same duty  must be in writing. ANSWER: T PAGE: 544 TYPE: N NAT: AACSB Analytic AICPA Legal 18. A principal’s liability in a contract with a third party may depend on the  authority given to the agent to act on behalf of the principal. ANSWER:
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This note was uploaded on 02/29/2012 for the course BUSINESS S PFMSIEB taught by Professor Kentmatthews during the Spring '08 term at Cardiff University.

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chp16 - Chapter 16 Agency TRUE/FALSE QUESTIONS 1.

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