Which of the Following Situations Is Most Likely to Explain

question 59

Multiple Choice

Which of the following situations is most likely to explain a net operating asset turnover that is higher than the industry norm?

• A) The company has more recently purchased fixed assets
• B) The company uses FIFO while competitors use LIFO
• C) The company uses accelerated depreciation method while competitors use straight line
• D) The company extends more credit to customers than competitors

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Definitions:

Actual Authority

The explicit power granted to an agent by a principal, either through oral or written agreement, allowing the agent to act on the principal's behalf.

Express Authority

Authorization granted to an agent in clear, direct, and definite terms by the principal.

Implied Authority

Authority not expressly granted but assumed to be given due to the nature of a job or position.

Apparent Authority

A form of authority that an agent seems to have because of actions or representations made by the principal, leading third parties to reasonably believe the agent is authorized.