A Good and Practical Solution to the Problems of Expense

question 73

Multiple Choice

A good and practical solution to the problems of expense account-related ethical problems is to:

• A) present all expense reports to the IRS for review.
• B) compare the reports to actual expenses of reliable salespeople and then set reimbursement guidelines based on your findings.
• C) ignore the problem if it involves amounts less than $25 per week and is associated with the higher performing salespersons.
• D) remove the expense report and move to a 100% commission-based plan where reps pay their own expenses.
• E) all of the above.

---

Definitions:

Lawful Instruction

Refers to directives or orders given that are within the bounds of the law and ought to be followed by the recipients.

Apparent Authority

A situation in which a reasonable third party would understand that an agent had authority to act, even if the agent did not have actual authority.

Express Agency

A type of agency relationship explicitly agreed upon by the principal and agent, either orally or in writing.

Implied Agency

A type of agency relationship created by actions of the parties involved rather than a written agreement, suggesting that one party agrees to act on behalf of another.