If a Contract Is Ambiguous Regarding Whether the Agent Has

question 45

Multiple Choice

If a contract is ambiguous regarding whether the agent has signed in a representative or an individual capacity:

• A) there is a presumption that the agent signed in a representative capacity.
• B) there is a presumption that the agent signed in an individual capacity.
• C) the agent and the principal will both be liable on the contract.
• D) parol evidence is admissible to establish the character in which the agent was acting.

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Definitions:

Retained Earnings

The cumulative amount of net income earned by a company that is retained and not distributed to shareholders as dividends.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts.

Net Income

The remaining earnings of a corporation after deducting all operating costs and tax obligations from its revenue.

Dividends Declared

The action by a company's board of directors to distribute a specified amount of the company’s earnings to its shareholders.