ACCT 324 Exam 2 Questions With Complete Solutions.

ACCT 324 Exam 2 Questions With Complete Solutions. The duty of ________blank is the generally considered the most important duty an agent owes to a principal. A.) obedience B.) loyalty C.) reimbursement D.) indemnification loyalty John, a real estate agent, buys for himself a property that his principal, Arthur, wanted to buy. If John is aware that Arthur wanted to buy the property, then the court will most likely take which of the following actions? A.) The court will grant legal rights for the property to the party who is willing to pay the most. B.) The court will grant John the legal rights for the property. C.) The court will sell the property to a third party. D.) The court will grant Arthur the legal rights fo D Employees are ________blank of an employer. agents ________blank is perhaps the most important consideration a court makes when determining whether a worker is an employee or an independent contractor. A.) Employer control B.) Employee pay C.) Implied agency D.) Tax law A Agency contracts do not need to be in writing unless an agent has been given power of authority or if the agent will be entering into a contract that the ________blank requires to be in writing. Statute of Frauds A principal has a duty to ________blank the agent for any losses the agent incurs in the course of working on behalf of the principal. A.) account to B.) compensate C.) indemnify D.) pay wages to C Principal-agent relationships are most significant for issues that are included in the category of ________blank law. contract Which statement best describes a fiduciary? A.) Fiduciaries have a duty to act primarily for another person's benefit. B.) Fiduciaries may choose to act for another person's benefit, but no duty exists. C.) Fiduciaries have a responsibility to act on their own behalf in a manner equal to how they may choose to act on behalf of another person. D.) Fiduciaries have a duty to act primarily for their own benefit. A Which of the following statements is true regarding a partially disclosed principal? A.) The principal and the agent are both considered parties to the contract and each may be liable separately from the other. B.) The third party is not aware the agent is acting on behalf of a principal. C.) The agent is never liable for the agreement because he or she is not a party to the transaction. D.) The agent is liable for the agreement because he or she is a party to the transaction, and the princi A Which of the following statements is true regarding an agent who commits a tort that injures a third party? A.) The agent is personally liable regardless of the principal's classification and liability of the principal.Correct B.) The principal is liable for the torts of his or her agent only if the principal directed the agent to commit the tort. C.) The agent is personally liable only if he or she was not acting within the scope of his or her employment. D,.) The principal will not be he A Which of the following statements is true of a constructive notice? A.) It usually consists of publication in a generally circulating newspaper for the area where the agency agreement existed.Correct B.) It must be given to third parties who have had business interactions with the agent, and it directly informs them about the termination. C.) It is received by parties directly related to the agency agreement. D.) It is rarely used to announce the termination of an agency agreement. A Why, by operation of laws, does an agency agreement terminate if the agent, unknown to the principal, acquires interest against the principal's interest? A.) Disloyalty of agent B.) Occurrence of a specific event C.) Revocation of authority D.) Changed circumstances A While a principal's tort liability depends upon whether the employee/agent was acting within the scope of his or her authority, misrepresentation liability depends upon which of the following? A.) Whether the agent discloses the existence of the agency B.) Whether the agency agreement is in writing C.) Whether the principal authorized the agent's act D.) Whether the principal is vicariously liable C In order for a third party to sue an employer for a tort committed by the employer's agent, the third party must establish which of the following? A.) That the agent did not make a substantial departure from the course of the employer's business B.) That the agent has been employed by the employer for more than three