With Respect to Ratification, Which One of the Following Statements

question 86

Multiple Choice

With respect to ratification, which one of the following statements is true?

• A) Ratification is the act of a principal approving a contract when his agent has exceeded his authority or acted without authority, and such approval gives the agent authority retroactively to the time the agent made the contract.
• B) When an agent, without the authority of his principal, has entered a contract for three computers and two printers, and the principal wants the computers but not the printers, he can ratify part of the contract.
• C) The only limitation on a principal's right to ratify is the power of the third party to set a time limit within which that ratification must take place.
• D) Irving has been given authority to contract for the purchase of 1000 jade tiles at up to $18 a piece. Instead, he buys from Cassiar Jade Co. 1200 jade tiles at $18.25 a piece. When Cassiar Jade finds out that Irving has exceeded his authority, it sells the tiles to Interior Designs Co. After Cassiar has sold the tiles, Irving's principal can no longer ratify the contract.
• E) The ratification by the principal must be in writing to be effective.

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Definitions:

Credit

A financial term denoting the ability to obtain goods or services before payment, based on the trust that payment will be made in the future.

Asset Accounts

Accounts that represent the different types of economic resources owned or controlled by a business, such as cash, inventory, and equipment.

General Ledger

A complete record of all financial transactions over the life of a company, serving as the primary source of information for the financial statements.

Chart of Accounts

A systematic listing of all accounts used by an organization, typically organized by type such as assets, liabilities, equity, revenues, and expenses.