Which of the Following Statements Is True of an Apparent

question 31

Multiple Choice

Which of the following statements is true of an apparent agency?

• A) The authority of an apparent agent is implied from the conduct of the parties.
• B) The principal is bound to the contracts entered into by an apparent agent.
• C) The third-party is not bound to a contract created by an apparent agent.
• D) The actions of an apparent agent create an apparent agency.

Understand the structure and components of financial statements.

Analyze changes in assets, liabilities, and equity through comparative balance sheets.

Interpret income statement figures and their impact on business performance.

Calculate and analyze cash flows from operating, investing, and financing activities.

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Definitions:

Profit Margin

A financial performance ratio, calculated by dividing net income by sales revenue, indicating how much profit a company keeps from its sales.

ROE

Return on Equity (ROE) is a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how effectively a company uses investments to generate earnings growth.

P/E Ratio

Price to Earnings Ratio, a valuation metric comparing a company's market share price to its per-share earnings.

Stock Price

The cost of purchasing a share of a company's stock, representing the market's value of a share of the company's equity.