The Application of Which of the Following Is Most Likely

question 54

Multiple Choice

The application of which of the following is most likely to be created by the liability arising from agency principles with respect to employees and independent contractors?

• A) the doctrine of vicarious liability
• B) the common law principle of agency
• C) the common law neighbour principle
• D) the doctrine of primary liability

---

Definitions:

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net assets, reflecting the value of the business's brand, customer relationships, and other unquantifiable assets.

Equity Method

An accounting technique used to record investments in which the investor has significant influence over the investee, typically involving adjusting the value of the investment over time to reflect shared profits or losses.

Equity Method

An accounting technique used to record investments in other companies, wherein the investment is initially recorded at cost and subsequently adjusted to reflect the investor's share of the investee’s net assets and income.

Intra-Entity Inventory Sales

Transactions involving the sale of inventory items between divisions or departments within the same company.