A Principal May Incur Liability

question 34

Multiple Choice

A principal may incur liability

• A) if a third party is induced to enter into a contract by the fraudulent misrepresentation of an agent.
• B) by revealing his or her identity in a situation where an agent negotiated a contract without disclosing his agency.
• C) where an agent reveals his agency in concluding a contract and acts within his authority.
• D) where an agent reveals his agency in concluding a contract and exceeds his authority.
• E) all of the responses are correct.

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Definitions:

Cost Volume Profit Model

A managerial accounting technique used to analyze how costs and sales volume affect profit.

Tax Factor

A numerical figure used to calculate the impact of taxes on an investment or financing decision, often representing the marginal tax rate.

Breakeven Point

The level of production or sales at which total revenues equal total expenses, with no profit or loss.

Sales Proportion

The ratio of a particular product's sales to the total sales of all products, often used to analyze the performance or popularity of products.