All of the Following Statements About the Rules Governing Agency

question 11

Multiple Choice

All of the following statements about the rules governing agency relationships are true EXCEPT

• A)An agent must be authorized to act on behalf of a principal.
• B)An agency agreement may grant certain powers to the agent as well as denying the agent other powers.
• C)The principal is responsible for the acts of agents only if the acts are criminal.
• D)Knowledge of the agent is presumed to be knowledge of the principal with respect to matters within the scope of the agency relationship.

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Definitions:

Ledger Accounts

Record books or digital records in accounting that are used to store, organize, and summarize a company's financial transactions, sorted by account.

AASB 10/IFRS 10

Standards dealing with the principles for the preparation and presentation of consolidated financial statements when an entity controls one or more other entities.

Voting Shares

Shares of a company's stock that grant the shareholder the right to vote on corporate matters, such as electing the board of directors and approving major corporate actions.

Protective Rights

Rights designed to protect the interest of the party holding those rights without giving that party power over the entity to which those rights relate.