If an Independent Contractor Enters into a Contract with a Third

question 79

Multiple Choice

If an independent contractor enters into a contract with a third party on behalf of the principal without express or implied authority from the principal to do so, who among the following is liable on the contract?

• A) the principal
• B) the independent contractor
• C) the third party
• D) both the principal and independent contractor

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Definitions:

Carrying Value

The net book value of an asset or liability on a company's balance sheet, calculated as the original cost minus any depreciation, amortization, or impairment costs.

Bond Discount

is the difference between the face value of a bond and its selling price when the bond is sold for less than its face value.

Straight Line Amortization

A method for calculating the periodic reduction in the carrying amount of an intangible asset, spreading the cost evenly over its useful life.

Par Value Bonds

Bonds issued with a fixed face value that is to be repaid at maturity, often different from their market value.