Accounting 241 Test 1Exam 87 Questions with Verified
Answers
Agency relationship formation - CORRECT ANSWER MUST be created for a lawful
prupose
If somebody is an employee of an LLC the strongest argument that they are an
agent? - CORRECT ANSWER Entered into an agency by agreement or express
agency
Formation of Agent/principal relationship through implied agency - CORRECT
ANSWER Created by act of the parties. If parties are acting like they are in a
principle/agent relationship
How can Implied agency be used as defense? - CORRECT ANSWER Used as a
defense as an agent
Someone hired to be general manager of a shoe shop
- manager starts hiring impolyees. Principal gets mad.
The express agency - hired to be general manager
Implied agency - you gave me reasonably authroity to do what is necessary to run
the shop
Apparent agency or Agency by estoppel formation - CORRECT ANSWER Principal
creates or allows a situation to occur where there is an apppearance of an agency
that doesn't really exist. Princpal is then bound by the acts of the apparent agent.
Hypothetical:
This is my agent they have full authority to get this deal done. Principal then
leaves. The principal told the agent no more than 60,000 but the 3rd party
doesn't know that. The agent then agrees to 100,000 for the transaction. Can the
3rd party enforce the 100,000 price tag? - CORRECT ANSWER Yes they can. The
3rd party is protected.
, If it is not a principal/agent relationship, then it is an independent contractor -
CORRECT ANSWER Employer has no control over the details of IC performance of
the work
Liability stays with the IC UNLESS
- you hire the contractor to do unusually hazardous task (Explode is an unusually
hazardous task). PRINCIPAL LIABLE
-Hired IC to negotiate and enter a contract for you then you are bound by that
contract
Implied agency - CORRECT ANSWER Things that are reasonably necessary to get
principals express instructions done
Difference between express and implied agency - CORRECT ANSWER Express:
Here is what I am authorizing you todo
Implied: might not have been listed in the express instructions but it is implied
that in order to get express done.
Agents duties - CORRECT ANSWER Duty of loyalty
Duty of Loyalty - CORRECT ANSWER No Self Dealing
The agent is engaged in some separate businesss apart from the principals
engagement and what the agent has been hired to do. The principals and agents
businesses cannot hire each other.
Can be waived if the self dealing is fully disclosed and agreed to in advance
Principals duties - CORRECT ANSWER Duty of idenmification
A principal has to cover any liability that the agency reasonably incurred within
acting with the scope of their agency
What is the main differnce between an agent relationship and an independent
contractor? - CORRECT ANSWER Respodeat superiority
Respondeat Superior Doctrine - CORRECT ANSWER Vicarious liability - the
principle is liable for anything the agent does on his/her behalf
Answers
Agency relationship formation - CORRECT ANSWER MUST be created for a lawful
prupose
If somebody is an employee of an LLC the strongest argument that they are an
agent? - CORRECT ANSWER Entered into an agency by agreement or express
agency
Formation of Agent/principal relationship through implied agency - CORRECT
ANSWER Created by act of the parties. If parties are acting like they are in a
principle/agent relationship
How can Implied agency be used as defense? - CORRECT ANSWER Used as a
defense as an agent
Someone hired to be general manager of a shoe shop
- manager starts hiring impolyees. Principal gets mad.
The express agency - hired to be general manager
Implied agency - you gave me reasonably authroity to do what is necessary to run
the shop
Apparent agency or Agency by estoppel formation - CORRECT ANSWER Principal
creates or allows a situation to occur where there is an apppearance of an agency
that doesn't really exist. Princpal is then bound by the acts of the apparent agent.
Hypothetical:
This is my agent they have full authority to get this deal done. Principal then
leaves. The principal told the agent no more than 60,000 but the 3rd party
doesn't know that. The agent then agrees to 100,000 for the transaction. Can the
3rd party enforce the 100,000 price tag? - CORRECT ANSWER Yes they can. The
3rd party is protected.
, If it is not a principal/agent relationship, then it is an independent contractor -
CORRECT ANSWER Employer has no control over the details of IC performance of
the work
Liability stays with the IC UNLESS
- you hire the contractor to do unusually hazardous task (Explode is an unusually
hazardous task). PRINCIPAL LIABLE
-Hired IC to negotiate and enter a contract for you then you are bound by that
contract
Implied agency - CORRECT ANSWER Things that are reasonably necessary to get
principals express instructions done
Difference between express and implied agency - CORRECT ANSWER Express:
Here is what I am authorizing you todo
Implied: might not have been listed in the express instructions but it is implied
that in order to get express done.
Agents duties - CORRECT ANSWER Duty of loyalty
Duty of Loyalty - CORRECT ANSWER No Self Dealing
The agent is engaged in some separate businesss apart from the principals
engagement and what the agent has been hired to do. The principals and agents
businesses cannot hire each other.
Can be waived if the self dealing is fully disclosed and agreed to in advance
Principals duties - CORRECT ANSWER Duty of idenmification
A principal has to cover any liability that the agency reasonably incurred within
acting with the scope of their agency
What is the main differnce between an agent relationship and an independent
contractor? - CORRECT ANSWER Respodeat superiority
Respondeat Superior Doctrine - CORRECT ANSWER Vicarious liability - the
principle is liable for anything the agent does on his/her behalf
