An Agent Is Trying to Sell a House for $100,000

question 149

Multiple Choice

An agent is trying to sell a house for $100,000 for her principal. The principal will sell the house for as little as $80,000, but wants to get as much as possible. The agent tells her cousin to offer $81,000. The agent's actions are:

• A) a legitimate effort to get the deal done that will benefit everyone involved
• B) a violation of the duty of accounting
• C) a violation of the duty of loyalty
• D) a violation of the duty of notification to let the principal know he can counter-offer at a higher price
• E) unethical, but it does not violate legal duties

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Definitions:

Weighted Average

A calculation that takes into account the varying weights or importance of different elements in a data set, often used in accounting and inventory management.

Inventory Units

The quantity of individual items or products that a company holds in stock at any given time.

Cost Flow Assumption

An accounting method used to value the cost of goods sold and ending inventory.

Specific Identification

Specific Identification is an inventory valuation method where costs are assigned to individual items, allowing for precise cost determination of sold goods.