In Which of the Following Situations Is the Agent Not

question 35

Multiple Choice

In which of the following situations is the agent not liable should the principal breach the contract with the third party?

• A) agents are liable in all agency situations
• B) partially disclosed agency
• C) undisclosed agency
• D) disclosed agency

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Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts, thereby resetting the temporary accounts for the new period.

Temporary Accounts

Accounts used to track transactions within a fiscal period that are then reset to zero at the start of the next period, such as revenue and expense accounts.

Retained Earnings

Part of shareholders' equity on a company's balance sheet, representing the amount of net income left over for the business after it has paid out dividends to its shareholders.

Control Account

An account used in the general ledger to summarize the balances of subsidiary accounts and facilitate the verification of financial information accuracy.