Which of the Following Is a True Statement

question 26

Multiple Choice

Which of the following is a true statement?

• A) Ratification applies to previously unauthorized acts.
• B) Actual authority must be expressly created and cannot be based on custom or past dealings.
• C) Apparent authority is based on what the principal communicates to the agent and not to the third party.
• D) Actual authority must always be expressed in writing.

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Definitions:

Permanent/Temporary

Terms distinguishing between accounts that are not closed out or reset at the end of the accounting year (permanent accounts) and those that are (temporary accounts).

Normal Balance

The standard side (debit or credit) on which increases to an account are recorded.

Financial Statement

Reports that summarize the financial condition and operations of a business.

Permanent/Temporary

Conceptual labels for different types of accounts in accounting, with permanent accounts being those that carry their balances into the next accounting period and temporary accounts being closed at the end of each period.