A Principal May Incur Liability

question 17

Multiple Choice

A principal may incur liability

• A)if a third party is induced to enter into a contract by the fraudulent misrepresentation of an agent.
• B)by revealing his or her identity in a situation where an agent negotiated a contract without disclosing his agency.
• C)where an agent reveals his agency in concluding a contract and acts within his authority.
• D)where an agent reveals his agency in concluding a contract and exceeds his authority.
• E)All of the responses are correct.

Analyze the effects of inventory costing methods (LIFO, FIFO, Average) on financial outcomes.

Understand the concept of LIFO reserve and its financial implications.

Calculate inventory purchases and ending inventory amounts accurately.

Recognize the financial statement implications of inventory overstatement or understatement.

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Definitions:

General Ledger

The primary accounting record of a company that contains all the account balances needed to prepare financial statements.

Accounts Payable

Liabilities owed by a business to its suppliers or vendors for goods and services received but not yet paid for.

General Ledger

A comprehensive set of accounts that records all financial transactions of a business, organized by account.

Subsidiary Ledger

A subsidiary ledger is a detailed ledger that contains account-specific information, supporting and connected to the general ledger for a comprehensive accounting system.