Division a Reported Income from Operations of $975,000 and Total

question 139

Multiple Choice

Division A reported income from operations of $975,000 and total service department charges of $675,000. As a result,

• A) net income was $300,000
• B) the gross profit margin was $300,000
• C) income from operations before service department charges was $1,650,000
• D) consolidated net income was $300,000

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Definitions:

Respondeat Superior

A legal principle stating that an employer or principal is legally liable for the wrongful actions of an employee or agent, provided these actions happened in the course of their employment or agency.

Employee

Someone who is classified as a paid worker for a principal.

Apparent Authority

A situation where a reasonable third party would understand that an agent had authority to act, even if the agent did not have actual authority.

Tort

An act of wrongdoing or violation of a right that results in civil legal consequences.