Business Its Legal, Ethical, and Global Environment: Chapter 17. All Answers - $8.99   Add to cart

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Business Its Legal, Ethical, and Global Environment: Chapter 17. All Answers

Business Its Legal, Ethical, and Global Environment: Chapter 17 1. The presence of a master-servant relationship determines whether or not a principal must pay wage taxes and withhold income taxes. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Names and Roles: Agency Terminology : Bloom's: Knowledge 2. In a master/servant relationship, the principal exercises little control over the agent. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Names and Roles: Agency Terminology : Bloom's: Knowledge 3. An independent contractor is not controlled directly by the principal. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Names and Roles: Agency Terminology : Bloom's: Knowledge 4. The Restatement of Agency has been adopted in all states. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Names and Roles: Agency Terminology : Bloom's: Knowledge 5. Express authority must be in writing. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 6. An agency contract must be evidenced by a record to be valid. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 7. An agency at will is a relationship in which there is no definite ending date. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of Agents Under Employment at Will : Bloom's: Knowledge 8. Personnel manuals have been held to constitute an employee contract. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of Agents Under Employment at Will : Bloom's: Knowledge 9. The public policy exception to employment at will does not afford protection for whistle-blowers. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of Agents Under Employment at Will : Bloom's: Knowledge 10. In an agency relationship, both the principal and agent must have legal capacity. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 11. An unincorporated association is a group that acts as an entity but has no legal existence. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 12. Implied authority is the extension of express authority by custom. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 13. The ability of a clerk in a store to accept payment for goods is an example of implied authority. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Application 14. Apparent authority and agency by estoppel are the same thing. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 15. A principal cannot ratify an act of an agent retroactively. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 16. Ratification requires full knowledge of the transaction. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 17. In a master/servant relationship, the principal is liable for the torts of the agent committed within the scope of employment. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Knowledge 18. A principal is not liable for an accident caused by its delivery person. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Knowledge 19. A real estate agent who fails to disclose his interest as a buyer to his seller principal has violated his duty of loyalty. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal The Principal-Agent Relationship : Bloom's: Application 20. There is no liability of employers for the acts of independent contractors. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Knowledge 21. Principals and agents have a fiduciary relationship. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal The Principal-Agent Relationship : Bloom's: Knowledge 22. Express and implied authority together are called real authority. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 23. Agents can collect payoffs made during the course of conducting the principal's business. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal The Principal-Agent Relationship : Bloom's: Application 24. Agents are liable to principals for negligence in performing their duties. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal The Principal-Agent Relationship : Bloom's: Knowledge 25. A gratuitous agency is one in which the agent is not paid. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal The Principal-Agent Relationship : Bloom's: Knowledge 26. A gratuitous agency is void. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal The Principal-Agent Relationship : Bloom's: Knowledge 27. Firing an agent does not end apparent authority. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of the Agency Relationship : Bloom's: Knowledge 28. Constructive notice of termination of an agent is public notice. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of the Agency Relationship : Bloom's: Knowledge 29. Public notice of termination of an agent is not required. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of the Agency Relationship : Bloom's: Knowledge 30. Courts view non-compete agreements against the employees and for the employers. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal The Principal-Agent Relationship : Bloom's: Knowledge 31. The intentional torts of agents are never the responsibility of the principal. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Knowledge 32. All states recognize non-compete agreements as enforceable contract clauses. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal The Principal-Agent Relationship : Bloom's: Knowledge 33. The employment-at-will doctrine prohibits the firing of nonunion or noncontract employees. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of Agents Under Employment at Will : Bloom's: Knowledge 34. Apparent authority ends when an agent is fired. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of the Agency Relationship : Bloom's: Knowledge 35. Apparent authority ends when an agent quits. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of the Agency Relationship : Bloom's: Knowledge 36. Ratification of a contract by a principal releases the agent from all liability to the third party. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 37. In a fully disclosed principal situation in which the agent is acting with authority, only the principal is liable on the contract. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Knowledge 38. Unless protected by a statute, an agent for an unincorporated association has full liability on contracts entered into on behalf of that association. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 39. Agents in undisclosed principal situations never have personal liability. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Knowledge 40. A master-servant relationship is one in which the principal has little control over the agent. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Names and Roles: Agency Terminology : Bloom's: Knowledge 41. A power of attorney is an example of an agency relationship. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Names and Roles: Agency Terminology : Bloom's: Knowledge 42. The Uniform Unincorporated Nonprofit Association Act provides for limited liability of the members of a nonprofit organization that is not incorporated. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Application 43. The duty of loyalty of an agent to a principal does not cover conflicts of interest. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal The Principal-Agent Relationship : Bloom's: Knowledge 44. Post-employment non-compete agreements are void. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal The Principal-Agent Relationship : Bloom's: Knowledge 45. Post-employment non-compete agreements are unenforceable. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal The Principal-Agent Relationship : Bloom's: Knowledge 46. An employer is only liable for its actions when hiring, not its failure to do something. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Knowledge 47. A real estate agent who represents both buyer and seller in a transaction without disclosure to both has breached the duty of loyalty. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal The Principal-Agent Relationship : Bloom's: Knowledge 48. There is no apparent authority in an undisclosed principal relationship. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Knowledge 49. Respondeat superior is no longer applied in agency relationships. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Knowledge 50. There is no employer liability for negligent hiring. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Knowledge 51. An independent contractor is not an agent of the principal. a. b. 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Names and Roles: Agency Terminology : Bloom's: Knowledge 52. A sales clerk at a department store is an example of an independent contractor. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Names and Roles: Agency Terminology : Bloom's: Application 53. An employee who is asked to take company cash to the bank on his lunch hour is not in the scope of employment during that lunch hour. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Application 54. Real estate agents would not customarily have the authority to enter into sales contracts for their clients. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Application 55. “I’ll make good on my employee’s promise,” is an example of a ratification. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Application 56. “Talk to Ann. She used to work here, but I think she is the best one to get this deal done for us,” is an example of express authority given to an agent. a. b. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Application 57. Which is a requirement for the creation of an agency relationship? a. a written agreement b. principal with capacity c. agent with capacity d. none of the above b 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Comprehension 58. Which is not an example of an independent contractor relationship? a. master/servant b. lawyer/client c. accountant/client d. All of the above are not independent contractors. a 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Names and Roles: Agency Terminology : Bloom's: Application 59. The Restatement of Agency: a. is a summary of the common law agency. b. has been adopted in all states. c. is legislative law. d. none of the above a 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Names and Roles: Agency Terminology : Bloom's: Knowledge 60. Express authority: a. must be in writing. b. can limit the agent's authority. c. includes customary authority. d. none of the above b 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Knowledge 61. An employment-at-will relationship is: a. one in which there is a definite ending date. b. rare in the employment market. c. now illegal. d. none of the above d 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of Agents Under Employment at Will : Bloom's: Comprehension 62. A personnel manual: a. can constitute a contract in an employment-at-will relationship. b. can disclaim any promises made therein. c. is never a contract. d. none of the above a 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of Agents Under Employment at Will : Bloom's: Comprehension 63. The public policy exception to the employment-at-will doctrine protects: a. employees who are fired with cause. b. employees who engage in illegal conduct. c. whistle-blowers. d. none of the above c 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of Agents Under Employment at Will : Bloom's: Comprehension 64. An unincorporated association: a. has no liability for its members. b. is not a principal with capacity. c. can have agents. d. none of the above b 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Comprehension 65. Mary Scoot was hired to manage the Cactus Cart, a tiny kiosk located in Sky Harbor Airport in Phoenix. No specific duties were listed, but the business owner who hired Mary told her, "Just sell the plants and deposit the money." Mary would have the implied authority to: a. take checks as payment. b. change the business name. c. sell the kiosk. d. all of the above a 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Creation of the Agency Relationship : Bloom's: Application 66. Under apparent authority: a. a principal is never liable for the acts of an agent. b. a principal is liable for creating the appearance of an agency relationship. c. there is no agency relationship. d. none of the above b 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Creation of the Agency Relationship : Bloom's: Application 67. Which is a requirement for establishing apparent authority? a. underlying express authority b. an agency agreement c. both a and b d. none of the above d 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 68. If the act of an agent is ratified: a. there is retroactive authority for the act. b. the principal has agreed to allow the agent to be liable. c. the agent then has express authority for that act in the future. d. none of the above a 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 69. In a master-servant relationship, the principal most likely will need to do which of the following? a. Withhold income taxes for the agent b. Pay FICA for the agent c. Pay FUTA for the agent d. All of these d 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Names and Roles: Agency Terminology : Bloom's: Application 70. Principals are liable for the acts of independent contractors if: a. the acts are inherently dangerous activities. b. the independent contractor was negligently hired. c. both a and b d. none of the above c 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Knowledge 71. A fiduciary is required to: a. act in the best interests of the principal. b. eliminate all risk for the principal. c. hire a trustee to supervise the funds involved that belong to the principal. d. none of the above a 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal The Principal-Agent Relationship : Bloom's: Comprehension 72. The purpose of anti-retaliation statutes is to protect: a. employers from whistle-blowing employees. b. government agencies from suit in the event a private employer is investigated because of an employee's claim. c. whistle-blowing employees. d. none of the above c 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of Agents Under Employment at Will : Bloom's: Comprehension 73. In which of the following situations is an agent liable to third parties? a. in a situation where there is a fully disclosed principal but only apparent authority b. in a situation where there is a fully disclosed principal but only implied authority c. in a situation where the principal is an unincorporated association d. all of the above c 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Comprehension 74. Jane and Joseph Sechrist signed a contract to have a swimming pool built in their backyard for $10,000. The salesman for the pool company signed the contract as well on a space marked "Salesperson." Two days after the contract was signed, the salesman called the Sechrists back and asked them to come in and sign a new contract for $11,000 because the vice president had not approved the original price. Jane has checked the contract and discovered that there is no language that requires the approval of anyone other than the salesperson. Jane and Joseph can have their pool built for $10,000 because: a. the pool company was bound once Jane and Joe signed the contract. b. the pool company has ratified the contract. c. of misrepresentation. d. the salesman had at least apparent authority to bind the pool company. d 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Creation of the Agency Relationship : Bloom's: Application 75. Gilda Steinforth is a partner in the law firm of Jones, Deloitte & Ernst. A wealthy couple has met with her and asked her to draw up a trust for a portion of their property. They gave Steinforth a check for $10,000 as a retainer fee and a check for $500,000 to begin the trust. Within two days after her meeting with the couple, Gilda and the checks are gone. The couple wishes to recover from Jones, Deloitte & Ernst. Which of the following statements is ? a. The couple may not recover since Jones, Deloitte & Ernst is not responsible for the intentional torts of its employees. b. The couple may not recover since Steinforth, as a lawyer, was an independent contractor and not a servant of the firm. c. The couple may not recover since Steinforth had no express or implied authority to receive the checks. d. none of the above d 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Application 76. Haskins is an officer of a real estate development firm. Haskins purchased a piece of property in a rural area of Arizona with the idea of building resort homes there. The firm has always had board resolutions for purchases of property (as is common practice) but there was no resolution for this property purchase. The other officers in the firm have learned of the value of the property and are concerned that the firm may not own the property. Which of the following statements is ? a. The firm can ratify Haskin's actions and take over the contract. b. The firm cannot ratify the contract unless Haskins had express authority to buy land. c. If the firm ratifies the contract, the effect is that Haskins is released from liability on it. d. none of the above a 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Creation of the Agency Relationship : Bloom's: Application 77. In which of the following situations does the agent have no liability to third parties? a. contract entered into with express authority and a fully disclosed principal b. contract entered into with no authority but later ratified in full by the principal c. contract entered into for a corporation before the corporation was formed but with full knowledge and support of the incorporators d. The agent has no liability in any of the above. a 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Comprehension 78. Russ Belmont is a staff accountant at a bank in the downtown Phoenix area. Belmont commutes to the bank each day from his suburban home in Mesa - a distance of 19 miles each way. Belmont's working hours are 8:00 AM to 5:00 PM and he commutes from 7:15 AM until he reaches the bank's parking garage between 7:45 and 8:00 (depending upon the traffic). If Russ is in an accident while on the freeway at 7:30 AM: a. the bank will be liable for any injuries to third parties. b. the bank will not be liable for any injuries to third parties. c. Belmont is an independent contractor and the bank will have no liability for injuries or damages in the accident. d. none of the above b 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Application 79. Russ Belmont is a staff accountant at a bank in the downtown Phoenix area. Belmont is sent to various branches throughout the state to do audits and has an accident while en route to one of the audits. Which of the following statements is ? a. The bank will be liable for any injuries to third parties. b. The bank will not be liable for any injuries to third parties. c. Belmont is a professional and an independent contractor and the bank will not be liable. d. none of the above a 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Application 80. Which of the following is necessary to create an agency relationship? a. consideration b. an agent with contractual capacity c. a ratification by the principal d. none of the above d 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 81. Firing an agent terminates: a. express authority. b. implied authority. c. apparent authority. d. a and b only e. a, b, and c d 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of the Agency Relationship : Bloom's: Comprehension 82. Lingering apparent authority results from: a. the failure to give notice of termination. b. ratification. c. the lack of capacity on the part of the principal. d. none of the above a 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of the Agency Relationship : Bloom's: Comprehension 83. Joe Helquist and Samantha Gillis were partners in the operation of an office supply business for 32 years. Joe had always handled suppliers and Samantha was responsible for running the store and managing employees. Joe decided to retire and Samantha gave him a fine retirement dinner. Joe had some financial setbacks shortly after retirement when his wife became ill and two of his children decided to go on for their masters' degrees. Joe began ordering supplies from the usual suppliers since they were not aware of his retirement. Joe would intercept the supplies at the loading dock and then sell them on his own. Samantha soon caught the discrepancy in the bills and her inventory and refused to pay the suppliers when she learned of Joe's scheme. Which of the following statements is correct? a. Samantha is not liable to the suppliers since Joe's authority terminated. b. Samantha is not liable to the suppliers because Joe's acts constituted fraud. c. Samantha is liable to the suppliers. d. none of the above c 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Termination of the Agency Relationship : Bloom's: Application 84. An agent for which of these would have authority to act? a. An unincorporated company b. A minor c. An incompetent person d. None of these d 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Application 85. Which of these ends apparent authority? a. Departure of the agent b. Retirement of the agent c. Termination of the agent d. None of these d 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of the Agency Relationship : Bloom's: Knowledge 86. The breach of the fiduciary duty by an agent: a. results in termination of the agent. b. terminates the agent's apparent authority. c. does not terminate an agent's implied authority. d. none of the above a 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal The Principal-Agent Relationship : Bloom's: Knowledge 87. Alan Freeman and Bill Freeman, brothers, operated a residential construction firm. There were three divisions of the firm: single-family homes, townhomes, and custom homes. Alan did not enjoy the demands of custom home buyers and Bill did not enjoy the cookie-cutter work of the other divisions. The brothers agreed to split the business with Bill assuming the responsibilities and contracts of the custom home division and Alan handling the remaining divisions. Alan told Bill he could continue to use the company offices until he was able to find offices of his own. Bill met his clients at the company offices, used the plans of the company and even continued to use the company stationery. Three months later Bill left town, leaving custom homes unfinished and taking the deposits of three customers with him. The customers have sued Alan. Which of the following statements is ? a. Alan is not liable since the relationship had been terminated. b. Alan is liable because of apparent authority. c. Bill is not liable because he was Alan's agent. d. none of the above b 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Application 88. In an undisclosed principal situation in which the agent does not have the authority to enter into a contract for real property and does so: a. only the principal is liable on the contract. b. the third party can elect to hold the principal or agent liable. c. only the agent is liable on the contract. d. none of the above c 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Comprehension 89. To bind the third party, restrictions on an agent's authority must be: a. known to the third party. b. in contract form between the agent and principal. c. in writing. d. none of the above c 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Comprehension 90. A pizza deliverer who is in an accident while en route to deliver a pizza for a restaurant has: a. no liability for the accident. b. the only liability for the accident if he was driving his own car. c. liability along with the restaurant for the accident. d. none of the above c 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Application 91. Which of the following functions would be implied authority for an apartment manager? a. selling the apartment complex b. selling the apartments' appliances c. collecting rent from the tenants d. All of the above would be included in implied authority. c 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Creation of the Agency Relationship : Bloom's: Application 92. Which of the following is not a factor in determining whether an agent is a servant or independent contractor? a. level of supervision b. whether the agent has his or her own office c. whether the agent has a college degree d. whether the agent has more than one client e. All of the above are not factors. c 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Names and Roles: Agency Terminology : Bloom's: Comprehension 93. What is the general rule with regard to employer liability for employee accidents occurring while the employee is on the way to work? a. The employer is generally not liable. b. The employer is liable unless it furnishes transportation for employees. c. The employer is liable if the employee is reporting to work early. d. both b and c e. none of the above a 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Application 94. Jan hires Duncan to act as her agent in acquiring some property for the development of a new subdivision she is planning that will be an elegant planned community. Jan instructs Duncan that he is not to say he is working for her or, for that matter, that he is working for anyone. If Duncan enters into a contract for land for Jan that is the parcel she wanted: a. Duncan only is liable on the contract for the purchase of the land. b. Jan can never be held liable for the land because Duncan acted in his name. c. both Jan and Duncan are liable on the contract for the purchase of land. d. it is fraud to conceal the identity of a party to a contract. e. none of the above c 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Application 95. Which of the following is not an independent contractor relationship? a. one between a corporation and its outside legal counsel b. one between a corporation and its vice president/general counsel c. one between a lawn service company and a homeowner d. All of the above are independent contractor relationships. b 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Names and Roles: Agency Terminology : Bloom's: Application 96. In a partially disclosed principal relationship, who is liable to the third party on a contract within the agent’s authority? a. principal b. agent c. both a and b d. none of the above c 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Comprehension 97. In a partially disclosed principal relationship, who is liable to the third party on a contract outside the agent’s authority? a. principal b. agent c. both a and b d. none of the above b 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Comprehension 98. Which of the following terminates apparent authority? a. firing an employee b. an employee quitting c. an employee retiring d. none of the above d 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of the Agency Relationship : Bloom's: Knowledge 99. Which of the following types of agency relationships would have to be evidenced by a record to be valid? a. A power of attorney to close on a land transaction. b. A power of attorney to close on the sale of a golf cart for $4,000. c. A power of attorney to sign a six-month lease. d. All of the above must be evidenced by a record for the agent to have authority. a 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 100. Ellen Fishman was hired by Attics, Inc., a company that does attic refurbishments and redesigns, to evaluate attics, provide homeowners with estimates, and, hopefully, sign them up with contracts for their attics. Ellen provided an estimate of $11,000 to the Kornbluths for a redesign of their attic. Because she was new at the job, Ellen forgot the demolition costs in the estimate. However, the Kornbluths signed a contract Ellen presented and put down a 10% deposit of $1,100. Attics, Inc.’s president has refused to do the attic for anything less than $15,000, what the estimate should have been. The Kornbluths have no experience with remodeling and had only one other estimate for the refurbishment, which was $12,500. a. Attics, Inc. need not perform the refurbishment because Ellen did not have authority for the bid or contract. b. Attics, Inc. must perform the refurbishment for $11,000 because Ellen had authority to enter into the contract. c. Attics, Inc. need not perform the contract for $11,000 because Ellen made a mistake. d. none of the above b 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking The Principal-Agent Relationship : Bloom's: Application 101. Ellen Fishman was hired by Attics, Inc., a company that does attic refurbishments and redesigns, to evaluate attics,provide homeowners with estimates, and, hopefully, sign them up with contracts for their attics. Ellen provided an estimate of $11,000 to the Kornbluths for a redesign of their attic. Because she was new at the job, Ellen forgot the demolition costs in the estimate. However, the Kornbluths signed a contract Ellen presented and put down a 10% deposit of $1100. Attics, Inc.’s president has refused to do the attic for anything less than $15,000, what the estimate should have been. The Kornbluths have no experience with remodeling and had only one other estimate for the refurbishment, which was $12,500. Attics, Inc. terminated Ellen. However, Ellen still had all the materials, books, contract forms, and her card from Attics, Inc. Ellen went out and got three homeowners to sign contracts for refurbishments for prices ranging from $15,000 to $22,000. Attics, Inc.: a. need not perform any of the contracts because Ellen lacked authority. b. need not perform any of the contracts because the termination ended all of Ellen’s authority. c. must perform on the contracts because Ellen had lingering apparent authority. d. both a and b c 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Termination of the Agency Relationship : Bloom's: Application 102. Ellen Fishman was hired by Attics, Inc., a company that does attic refurbishments and redesigns, to evaluate attics,provide homeowners with estimates, and, hopefully, sign them up with contracts for their attics. Ellen provided an estimate of $11,000 to the Kornbluths for a redesign of their attic. Because she was new at the job, Ellen forgot the demolition costs in the estimate. However, the Kornbluths signed a contract Ellen presented and put down a 10% deposit of $1100. Attics, Inc.’s president has refused to do the attic for anything less than $15,000, what the estimate should have been. The Kornbluths have no experience with remodeling and had only one other estimate for the refurbishment, which was $12,500. Attics, Inc. terminated Ellen. However, Ellen still had all the materials, books, contract forms, and her card from Attics, Inc. Ellen went out and got three homeowners to sign contracts for refurbishments for prices ranging from $15,000 to $22,000. If Attics, Inc. performed the contracts Ellen negotiated, it would: a. need to take steps to terminate Ellen’s implied authority. b. need to take steps to terminate Ellen’s apparent authority. c. need not take any further steps because Ellen’s authority was terminated and it was just ratifying the contracts. d. none of the above b 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Termination of the Agency Relationship : Bloom's: Application 103. What is another term for an agency by estoppel? a. implied agency authority b. apparent agency authority c. authority by custom d. none of the above b 1 : Easy : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Knowledge 104. Brian Weyland was an agent for Clothes Horse, Inc., a clothing manufacturer. Weyland’s job was to find new designs and bring them to Clothes Horse for production. Weyland found a new style in women’s tops that he felt would be a top seller. Weyland obtained licenses from the designer and began producing the tops through a company of his own, Wey-Out Designs. Weyland: a. is free to compete because he was an independent contractor. b. has breached his duty of loyalty to Clothes Horse. c. has done nothing wrong as long as he obtained the proper licenses. d. both a and c b 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking The Principal-Agent Relationship : Bloom's: Application 105. James Schoenberger interviewed for a position with the Chicago Transit Authority (CTA). He talked with the person who would ultimately be his supervisor, Zu Christian, and was offered a salary of $19,300. Under CTA procedures, only the Placement Department could give final salary figures. When Placement's figure for Schoenberger was computed, it was lower, and Schoenberger sued for the higher figure. CTA claimed Zu Christian had no authority to offer a particular salary. Discuss the legal issues in the case from both CTA's and Schoenberger's perspectives. In Schoenberger v. CTA, 405 N.E.2d 1076 (Ill 1980), the court held that there was no apparent authority for Zu Christian because Schoenberger had worked through Placement and had seen the centralized hiring procedures and that Zu Christian did not make the offer. 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Application 106. Appendagez, Inc. is a Massachusetts corporation that manufactures jeans, tops, and sweaters under a line called faded glory. Mr. Segal had been one of their salespeople. During a trade show, he signed orders with several stores, but Appendagez did not ship because Segal was not their agent. Segal did, however, still have his display samples and order forms. Is Appendagez required to fill the orders? Yes. Lingering apparent authority existed because Segal still had orders and samples. Carl Wagner and Sons v. Appendagez, Inc., 485 F.Supp. 762 (NY 1980). 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Termination of the Agency Relationship : Bloom's: Application 107. Novosel was an employee of Nationwide Insurance and had refused to engage in political lobbying efforts for Nationwide. Novosel was terminated. Discuss Novosel's rights. He was probably an employee-at-will but the public policy exception would protect him against termination since he was exercising a First Amendment right. 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Termination of Agents Under Employment at Will : Bloom's: Application 108. Discuss the requirements for ending an agency relationship. Notify (public and private) of termination to stop apparent authority. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of the Agency Relationship : Bloom's: Knowledge 109. What is the difference between implied authority and apparent authority? Implied - extension of express; whatever is customary. Apparent - principal creates this by action in the eyes of third parties. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Creation of the Agency Relationship : Bloom's: Comprehension 110. Berth Ness signed a promissory note for the purchase of real estate in Arizona. Only his name appeared on the note. Berth had acted as an agent for several corporations and Louise Ness in the past. Upon default, the payee of the note brought suit to collect from the corporations and Louise. They claim Berth was not acting as their agent in the transaction and they are, therefore, not liable. Who is correct? Students should discuss the issues of actual and apparent authority. Did the payee know of any constraints on Ness? Would they assume Ness was acting for them? Ness v. Greater Arizona Realty, Inc., 517 P.2d 1278 (Az. 1974). 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Creation of the Agency Relationship : Bloom's: Application 111. Discuss the basic requirements for a non-compete agreement. To be valid, the non-compete agreement must be the following: 1) balance the need for protection between the employer and employee; 2) the covenant must be reasonable in geographic scope and time; and 3) the agreement must be validly formed under the applicable law. Students may also mention that in states where these agreements are unenforceable, employers may still try to enforce the concept of non-compete agreements through a tort action. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal The Principal-Agent Relationship : Bloom's: Comprehension 112. Discuss why the peer review procedure is successful in some companies. By utilizing three (or more) employees (managers and fellow employees), an employee may feel his or her complaint has been heard with less bias, and since there is potential for more widespread knowledge of decisions, the decisions by supervisors may be more thoughtful and consistent at the company. 1 : Moderate : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Termination of Agents Under Employment at Will : Bloom's: Knowledge 113. As you contemplate the purchase of a computer that has been a store demonstrator, the manager of the store says, "Look, take it. If it turns out to have problems, I'll take it back." Would the store manager have the authority to make this promise? The manager had at least apparent authority to make such a promise if not implied by business custom with respect to the scope of store manager's authority. The manager may have even had express authority. The customer will be protected in these circumstances. 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Creation of the Agency Relationship : Bloom's: Application 114. Elizabeth Drake worked as a nanny for Kimba and Zeus Baird and cared for their 3 children each day from 8 AM until 5:30 PM. At 10:00 AM each day, Elizabeth drove the Bairds' 3-year-old daughter to pre-school. On the way to the pre-school last Tuesday, Elizabeth failed to stop at a stop sign and struck a UPS truck. Could UPS make a claim against the Bairds? Yes, Elizabeth is in a master-servant relationship and the Bairds are liable for her negligence in the scope of employment 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Application 115. Hayley Franken works at Big Burger after school and on weekends. With her heavy course load, her job and being on the basketball team, Hayley finds that she is simply worn out most of the time. She has said to her manager at work, " Sometimes I am not even sure how I drive myself home because I want to sleep so much." Hayley worked a double shift at Big Burger and did not leave until 2 AM, 4 hours beyond her usual quitting time. On the way home, she apparently dozed off and struck another car head-on and was killed. Her parents are suing Big Burger for wrongful death. Discuss the liability issues. Traditionally, employers are not liable for accidents caused by employees on their way to and from work and so Big Burger is not liable. However, there have been some newer cases, as the McDonald's case in the book illustrates, to hold employers liable when they are aware that employees are tired and need help getting home. 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Application 116. Discuss the theories for employer liability on accidents caused by employees falling asleep when returning home from work. The theory is a type of supervision theory in that employers have overscheduled employees, mandating hours and work without taking into account the impact on their physical constraints. 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Comprehension 117. Aaron Smith, a junior at Yale, was a counselor at Camp Winipesaukee for the summer of 2007. Several of the children, ages 8-12 reported to their parents that they had been physically assaulted by Aaron while they were at camp. The children had signs of bruising and other injuries. The parents brought suit against Camp W, the corporation that operated the camp for their children’s injuries. Camp W says that it is not liable because (a) it had no knowledge of the assaults; (b) Aaron had not injured anyone in the past; and (c) what Aaron did was not within his scope of employment as a camp counselor. Discuss the liability and defense issues in the case. Students should discuss the difference between torts in the scope of employment and intentional torts. Ordinarily, employers are not responsible for the intentional torts, criminal acts of employees unless: 1. The employer had knowledge. 2. The employer did not adequately address the background check of the individual. Here there is no indication that Aaron had a problem. However, the likely sensitive nature of the job as well as the fact that it happened to more than one child will find Camp W liable for its lack of supervision. 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Application 118. Zaney, Inc. operated Zaney’s Bar and Grill. An officer of the corporation instructed the bartender at Zaney’s to “maintain order” at the bar. The bartender pulled out a gun and shot a patron because he was making advances to the girl sitting next to him. Which of the following is correct? a. Zaney’s Inc. is liable to the patron for the injuries caused by the bartender. b. Zaney’s is not a principal because it is a corporation. c. The bartender is not liable for the injuries to the patron because he was working for someone else at the time. d. Zaney’s is not liable for the injuries sustained by the patron. d 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Analysis 119. Rami Essaid worked for a large computer security firm. As part of his employment agreement, he had been told about and initialed on his contract a noncompete clause that prevented him from starting his own firm or working for a competitor in the area of computer security for six months following his termination of employment, for whatever reason. Rami quit his job and started his own firm that specializes in protecting websites from automated computer programs, the same type of work that he was doing for his former employer. His former employer has brought suit to stop Rami from operating his company for six months. Which of the following statements is correct? a. The noncompete clause is unenforceable because it inhibits his ability to earn a living. b. The noncompete clause is unenforceable because it runs for too long a time period. c. The noncompete clause is unenforceable because noncompete clauses are void. d. The noncompete clause is enforceable. d 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking The Principal-Agent Relationship : Bloom's: Analysis 120. The IRS is conducting an investigation of the construction industry because contractors routinely classify carpenters, dry-wallers, and plumbers who work on all of their projects as independent contractors. These craftsmen report for work on different jobs, but all of the jobs are managed by the same contracting firm. Which of the following will be most important in determining whether the craftsmen are employees rather than independent contractors? a. That they bring their own tools. b. That they determine which jobs they will work on and which they will not. c. That they are told to report for work on which days and at what time. d. That they work for other contractors. c 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Names and Roles: Agency Terminology : Bloom's: Analysis 121. Jay Housel, an employee at Raytheon Aircraft Services, was injured when his supervisor blasted compressed air into his backside while he was bending over his toolbox at the plant. Which of the following is correct about Raytheon’s liability in this case? a. Raytheon is not responsible for these kinds of intentional acts outside the scope of employment or that involve misuse of company tools. b. Raytheon could be responsible if it had knowledge of the supervisor’s prior misconduct. c. Raytheon is liable for all injuries that occur in the workplace. d. none of the above b 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Analysis 122. Kay of Kay’s Realty was representing Tom Tutone, a well known singer and songwriter, in his purchase of a home in Jackson Hole. She was to act as the buyer and then subsequently sign the property back over to Tom. The seller of the home was not to be told that anyone but Kay would hold title to the property. Which of the following statements is correct? a. The transaction is illegal because of misrepresentation because information has been withheld from the seller. b. The transaction involves an undisclosed principal. c. The transaction involves a partially disclosed principal. d. Tom is not liable on the purchase agreements for any homes. b 1 : Challenging : United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Liability of Principals for Agents' Conduct: The Relationship With Third Parties : Bloom's: Analysis

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