Mitchell Florists Had the Following Total Assets, Liabilities, and Equity

question 108

Multiple Choice

Mitchell Florists had the following total assets, liabilities, and equity as of December 31. $$\begin{array} { | l | r | } \hline \text { Assets } & \$ 450,000 \\\hline \text { Liabilities } & 135,000 \\\hline \text { Equity } & 315,000 \\\hline\end{array}$$ What is Mitchell's debt ratio as of December 31?

• A) 30%
• B) 70%
• C) 100%
• D) 43%

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Definitions:

Agency Relationship

A legal relationship where one party (the agent) acts on behalf of another party (the principal), with the authority to create legal obligations.

Authority End

signifies the termination or conclusion of the legal or official power held by an individual or entity.

Vicarious Liability

Refers to the situation where one party is held partly responsible for the unlawful actions of a third party.

Scope of Employment

The range of activities and duties an employee is expected to perform as part of their job, as defined by their contract or role description.