Which of the Following Is True Regarding the Form of Authority

question 38

Multiple Choice

Which of the following is true regarding the form of authority upon which an agency relationship may be created?

• A) Agency relationships can be created through expressed agency, but not through implied authority, apparent agency, or through ratification.
• B) Agency relationships can be created through expressed agency or through implied authority, but not through apparent agency or through ratification.
• C) Agency relationships can be created through ratification, but not through implied authority, apparent agency, or expressed authority.
• D) Agency relationships can be created through ratification or expressed agency, but not through implied authority or apparent agency.
• E) Agency relationships can be created through expressed agency, implied authority, apparent agency, and ratification.

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Definitions:

General Partner

An owner of a partnership who has unlimited liability and is active in the management of the partnership.

Capital Balance

The amount of money that a partner has invested in a partnership minus any withdrawals or distributions.

Capital Equity

The amount of owners' equity in a firm, representing the residual interest in the assets of the entity after deducting liabilities.

Partnership Income

The earnings distributed to partners in a partnership based on the partnership agreement or ownership percentage.