An Agency Through Operation of Law Is Established

question 72

Multiple Choice

An agency through operation of law is established:

• A) by a written contractual agreement of the parties
• B) by ratification of the agent's activities by the principal
• C) by the application of the doctrine of estoppel
• D) when the legislature authorizes an agency
• E) none of the other choices

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Definitions:

Liabilities

Financial obligations or debts owed by a company to external parties, which must be settled over time through the transfer of economic benefits.

Assets

Resources owned by a company that have economic value and can be measured and expressed in monetary terms.

Financial Accounting

The branch of accounting that focuses on the preparation of financial statements for external use, adhering to standardized guidelines.

External Decision Makers

Individuals or entities outside of a company that use its financial information to make decisions, such as investors and creditors.