Which of the Following Is True Regarding Whether an Agent's

question 27

Multiple Choice

Which of the following is true regarding whether an agent's signature may satisfy the requirement of negotiability that the signature of a maker or drawer appear?

• A) A duly authorized agent's signature on behalf of his or her principal binds the principal and satisfies the signature requirement for negotiability.
• B) An agent's signature on behalf of his or her principal cannot bind the principal and does not satisfy the signature requirement for negotiability.
• C) An agent's signature on behalf of his or her principal binds the principal and satisfies the signature requirement for negotiability only if specific authorization from the principal allowing the agent to act on the specific transaction at issue is attached to the document.
• D) A duly authorized agent's signature on behalf of his or her principal binds the principal and satisfies the signature requirement for negotiability only if the instrument is for an amount over $1,000.
• E) A duly authorized agent's signature on behalf of his or her principal binds the principal and satisfies the signature requirement for negotiability only if the instrument is in an amount of $1,000 or less.

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Definitions:

Deferred Tax Asset

An accounting term that refers to a situation where a business has paid more taxes or estimates that it will pay more taxes than it will owe.

Warranty Expense

Costs a company incurs due to repairing or replacing products under warranty.

Tax Penalty

A tax penalty is a fine or charge imposed by governmental authorities on individuals or organizations for failing to comply with tax laws.

Deferred Tax Asset

An asset on the balance sheet representing taxes paid or carried forward but not yet realized. This can arise due to timing differences between the recognition of income and expenses for financial reporting and tax purposes.