Where an Agent Has Taken an Unauthorized Action

question 30

Multiple Choice

Where an agent has taken an unauthorized action:

• A)the principal may not ratify the action even if it would be beneficial to the principal to do so.
• B)the principal is free to ratify the beneficial part of the unauthorized action and deny any burdensome part of it.
• C)any ratification by the principal must be for the entire action,not merely the beneficial part.
• D)the principal may ratify the action only if the principal is a corporation.

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Definitions:

Investing Activities

Part of the cash flow statement that shows the cash spent on and generated from investment-related activities such as purchases and sales of physical assets or securities.

Cash Inflows

Funds being received by a business from any source, including sales, investment income, or financing activities.

Cash Outflows

Money leaving a business through expenses, investments, and other financial activities, reducing the cash balance.

Operating Activities

Business activities directly related to the production and delivery of goods and services, which are reflected in the cash flow statement.