Which of the Following Is an Exception to the Rule

question 31

Multiple Choice

Which of the following is an exception to the rule that an agent will NOT be personally liable under a contract entered into with a third party?

• A)Where the agent has executed a deed in their own name.
• B)Where the agent is in breach of warranty of authority.
• C)Where the agent has not disclosed to the third party that they are an agent.
• D)All of the above.

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Definitions:

Expenses

The costs incurred in the process of generating revenue, including costs like rent, utilities, payroll, and materials.

Assets

Resources owned by a company from which future economic benefits are expected to flow to the entity, including cash, inventory, and property.

Liabilities

Financial obligations or debts that a business owes to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Expense Recognition Principle

The accounting principle that dictates expenses should be recognized in the period in which they are incurred, contributing to the accurate reporting of financial results.