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A100 study guide

by: George Kanavos

A100 study guide BUS-A 100

George Kanavos
GPA 3.0
Basic Accounting
Vivan Winston

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Basic Accounting
Vivan Winston
Study Guide
50 ?




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This 4 page Study Guide was uploaded by George Kanavos on Wednesday February 4, 2015. The Study Guide belongs to BUS-A 100 at Indiana University Northwest taught by Vivan Winston in Spring2015. Since its upload, it has received 102 views. For similar materials see Basic Accounting in Business at Indiana University Northwest.

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Date Created: 02/04/15
Review Sheet L201 Exam IV The exam will consists of 40 multiple choice questions worth 2375 points apiece for a total of 95 points The exam will cover the topics listed below Please note that I reserve the right to use topics and terms not included on this list for incorrect answers 1 Functions of agency law a Stimulate Commercial Activity it enables businesses to increase the number of transactions they can complete within a given time 2 Creation of an agency a The test for agency s existence is objective i Look to see if the P and A have a consensual relationship 1 P manifests consent that A shall act on her behalf 2 A manifests consent to act under P s control 3 Capacity a The Principal must have contractual capacity because the contract is between Pamp a third party b The agent need not have contractual capacity because A is just an intermediary 4 Nondelegable obligations a Certain duties or acts must be performed personally and cannot be delegated to an agent i Ex voting statements under oath signing certain documents b Service contracts in which the principal s performance is crucial such as certain contracts by lawyers doctors athletes and entertainers i Ex George Clooney cannot delegate his performance to Brad Pitt 5 Authority a Normally an agent can bind her principal on a contract or other matter only when the agent has Authority to do so Authority is agent s ability to affect her princiapl s legal relation c Two main forms we will learn more about both next class i Actual Authority 1 Express Principal has manifested to the agent in very specific or detailed language 2 Implied An agent generally has implied authority to act in a away the agent reasonably believes the principal wants him to act ii Apparent Authority Arises when the principal s manifestations cause a third party to believe reasonably that the agent is authorized to act in certain way 6 Duties of Agent to Principal a Duty of loyalty Avoid con icts of interest with the principal i No acquiring ofbenefit ii No competing w the principal iii No acting on behalf of a 3ml party cant be agent of buyer amp seller unless agreed Duty of confidentiality Cannot communicate confidential info Duty of obedience Follow reasonable instructions only legal ethical orders Duty of reasonable care Act wcare competence dilligence Duty to not receive a material benefit Compensation to be gained only from principal Duty to preserve trade secrets Even after termination rhrDPaan 7 Effect of termination on agent s authority a Termination by act of the parties i At a time or upon the happening of an event stated in the agreement If no time or event given then a reasonable time ii When a specified result has been accomplished if the agency was created to accomplish a specified result iii Mutual agreement of the parties iv At option of either party 1 Revocation When done by principal 2 Renunciation when done by the agent b Termination by operation of law i The death of an individual principal ii The death of an individual agent iii The principals permanent loss of capacity iv Upon circumstances that reasonably conclude principal wants no action 8 Ratification a If A contracts without actual or apparent authority P can still ratify by expressly affirming the contract accepting its benefits or suing th third party on the contract b Requirements i A must have been acting on principal s behalf ii P must have knowledge of all material facts iii P must accept the entire transaction iv Requires some manifestation of intent by P either express or implied acts words 9 Contract Liability of the Agent a Nature of the Principal determines when agents are liable for contracts they make i Disclosed Principal NOT LIABLE A principal is disclosed if a third party knows or has reason to know 1 That the agent is acting for the principal 2 The principal s identity ii Unidentified principal A principal is unidentified if the third party 1 Knows or has reason to know that the agent is acting for a principal 2 But lacks knowledge or reason to know the principal s identity iii Undisclosed principal A principle is undisclosed when the third party lacks knowledge or reason to know both the principal s existence and the principal s identity iv Nonexistent principal Unless there is an agreement to the contrary an agent who purports to act for a legally nonexistent principal such as an unincorporated association is personally liable when agent knows or has reason to know principal does not exist 10 Tort liability of the principal a Respondeat Superior i Under the doctrine an employer is liable for torts committed by agents who 1 are employees 2 commit the tort within the scope of employment ii Policy reasons for respondeat 1 The economic burdens of employee torts can best be born by employers 2 Emnlovers can b Direct liability c Liability for torts of nonemployee agents d Liability for agent s misrepresentations 11 Tort liability of the agent a Agents are usually liable for their own torts Normally they are not absolved from tort liability just because they acted under instruction from the principle i Exceptions 1 An agent can escape liability if she is exercising a privilege of the principle 2 A principal who is privileged to take certain acitons in defense of his person or property may authorize the agent to do the same 3 An Agent who makes misrepresentations while conducting the principles business is not liable to tort unless the agent knew or had reason to know of security 4 An agent is not liable for injuries to third persons caused by tools or instrumentalities 12 Classification of property a Personal versus real property i Personal property is defined by what s not Its not real property ii Real property is the earth s crust and all things firmly attached to it 1 Real property may be turned into personal property if it is detached from the earth 2 Personal property that is attached to the earth becomes real property a When personal property is attached to or used in comjunction with real peroperty in such a way as to be treated as part of the real proterty it is known as a xture b Tangible versus intangible property i Personal property may be either intangible or tangible 1 Tangible property has a physical existence 2 Intangible property has no physical existence 13 Wild animals a Basic Rule No one owns wild animals in their natural habitats Under the common law capture rule property rights in such animals are acquired only through physical possession b To acquire ownership of a wild animal by taking possession a person must obtain enough control over it to deprive it of its freedom 14 Found Property a Abandoned property i Property is considered to be abandoned if the owner abandoned the property out of his possession with the intent to relinquish ownership of it ii Finder who takes possession with intent to claim ownership acquires ownership b Lost property Property is considered to be lost when the owner did not intend to part with possession of the property c Mislaid property Is found property where the owner has taken some voluntary a 39irmative act in placing it down and the owner leaves it behind 15 Adverse possession a T0 acquire title by adverse possession one must possess land in a manner that puts the true owner on notice of the owner s cause of action against the nossessor b The adverse possesor s acts of possession must be i Open public ii Actually use it iii Continuous possession iv Exclusive V Hostile to owner s rightsThe law of adverse possession provides a significant exception to this general rule 16 Bailment a A bailment is the delivery of personal property by its owner or someone holding right to possess it the bailor to another person the bailee who accepts it and is under an express or implied agreement to return it to the bailor or to someone designated by the bailor Only personal property can be the subject of bailments b Liability i Unauthorized use Bailee will be strictly liable if anything happens ii Misdelivery situation If bailee mis 17 Copyrights 18 Patents 19 Trademarks 20 Trade Secrets 21 Sources of Federal Income Tax Law 22 Gross Income 23 Gains and losses on the disposition of property 24 The Fiscal Cliff


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