Mica Inc Began Operations in October, 2014

question 17

Multiple Choice

Mica Inc. began operations in October, 2014. During October, Mica sold ordinary shares for €600,000, earned revenue of €66,000, incurred expenses of €36,000, and paid dividends of €3,000. Retained earnings at the end the month is

• A) €27,000.
• B) €30,000.
• C) €627,000.
• D) €630,000.

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Definitions:

Express Authority

Pertains to the power explicitly granted by one party to another, typically in writing, to perform specific acts or functions.

Implied Authority

Powers not expressly stated but assumed to be granted in order for an individual to carry out duties effectively.

Apparent Authority

A situation where a third party reasonably believes an individual has the authority to act on behalf of another (such as an employer), even if that person does not have actual authority.

Ratified

An agreement or decision that has been formally approved and confirmed by the required parties.