The Amount of Owners' Equity in a Business Is Not

question 128

Multiple Choice

The amount of owners' equity in a business is not affected by:

• A)The percentage of total assets held in cash.
• B)The investments made in the business by the owner.
• C)The profitability of the business.
• D)The amount of dividends paid to stockholders.

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Definitions:

Actual Authority

The express or implied power granted by a principal to its agent, allowing the agent to perform acts on the principal's behalf, which legally binds the principal with third parties.

Apparent Authority

The appearance or assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.

Doctrine of Estoppel

A legal principle that prevents a person from asserting something contrary to what is implied by a previous action or statement by them, or by a previous relevant judicial determination.

Expressly Bind

To clearly, explicitly, or directly impose a legal obligation or duty.