The Normality Assumption Implies That

question 17

Multiple Choice

The normality assumption implies that:

• A)the population error u is dependent on the explanatory variables and is normally distributed with mean equal to one and variance σ².
• B)the population error u is independent of the explanatory variables and is normally distributed with mean equal to one and variance σ.
• C)the population error u is dependent on the explanatory variables and is normally distributed with mean zero and variance σ.
• D)the population error u is independent of the explanatory variables and is normally distributed with mean zero and variance σ².

Comprehend the impact of actual and apparent authority in binding the principal.

Recognize the conditions under which a third party is bound by notifications given to an agent with apparent authority.

Distinguish between express and implied authority and their implications for principal-agent relationships.

Explain the concept of ratification and its types in agency relationships.

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Definitions:

Owner's Drawings

The amount of money taken out from the business by the owner(s) for personal use.

Income Statement

A financial statement that shows a company's revenues and expenses over a specified period, resulting in net profit or loss.

Debit Entries

Accounting entries that increase an asset or expense account, or decrease a liability or equity account.

Credit Entries

Bookkeeping records that increase liabilities or equity or decrease assets on a company's balance sheet.