ACCT 324 Exam 2 Study Guide!
ACCT 324 Exam 2 Study Guide! ACCT 324 002
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This 5 page Study Guide was uploaded by Maddi_Jones on Thursday October 29, 2015. The Study Guide belongs to ACCT 324 002 at University of South Carolina taught by Julius David Johnson (P) in Fall 2015. Since its upload, it has received 432 views. For similar materials see Survey of Commercial Law in Accounting at University of South Carolina.
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Date Created: 10/29/15
Exam Info 16 TrueFalse 24 Multiple Choice Exam Includes Material from o Quizes 46 0 Chapters 3340 4243 Ch 33 Agency Formation and Duties Agency The relationship between a principal and an agent Agent one authorized to act for and on behalf of a principal Principal One who hires an agent to represent themselves Fiduciary Duty to act primarily for another person39s bene t Types of Agencies 0 Expressed formed by making an agreement written or verbal 0 Agency by Estoppel formed when a principal leads a 3rd party to think that another person serves as their agent but they didn39t previously make an express agreement There is a relationship here 0 Agency by Implied Authority formed by implication through the conduct of the parties 0 Agency by Rati cation exists when an individual misrepresents themselves as an agent 0 Power of attorney gives agent authority to sign legal documents on behalf of principal o Durable power of attorney continues to be effective after principal has become incapacitated Agency Relationships 0 PrincipalAgent when an employer hires an employee to enter into duciary contracts bene ting the principal o EmployerEmployee Employer has control over employee39s services and duties 0 EmployerIndividual Contractor employer hires a person that39s not an employee and has no control over their actions but is not held liable for any torts they may perform Duties of Principal o Duty of Compensation Reimbursement Cooperation and of safe working conditions Duties of Agent 0 Duty of loyalty performance noti cation obedience accounting Remedies of Principal o Constructive trust 0 Avoidance o Indemni cation Remedies of Agent o Tort and contract remedies 0 Demand for an accounting 0 Speci c performance Ch 34 Liabilities to 3rel parties and termination Contractual Liability of Agent and Principal o Classi cations of the principal Disclosed 3rd party knows that there is a principal and who they are Partiallv disclosed 3rd party knows that there is a principal but doesn39t know exactly who they are Undisclosed 3rd party doesn39t know that there is a principal at all 0 Authorized acts within the scope of the agent39s authority 0 Unauthorized acts not within the scope of the agent39s authority Tort Liability and the Agency Relationship 0 If the principal conducts tortious acts The law holds the principal liable for their crimes under two conditions 0 1 Principal directs the agent to commit a tortious act 0 2 Principal fails to provide proper equipment or instructions 0 Agent misrepresentation if the agent misrepresents themselves to a 3rd party the principal may be liable for the misrepresentation o Respondeat superior principal employer is liable NOT because they were personally at fault but because they negligently hired an agent Principal39s Liability and the Independent Contractor o If you hire an independent contractor you can39t be held liable for their tortious actions under quotrespondeat superiorquot unless the contractor engages in hazardous activities 0 Crime and Agency Relationships 0 If an agent commits a crime they are always the ones held liable Termination of the Agency Relationship 0 Termination bv acts of parties may happen because too much time has gone by the deed is done some special event occurred both parties mutually agree to end it there39s a revocation of authority or there39s a renunciation of the agent 0 Termination by operation of law automatic termination due to the death of a party changed circumstances insanity bankruptcy change in law disloyalty of agent or war Ch 35 Forms of Business Organizations 0 Major forms of business organizations 0 Sole proprietorship owner has all control and pro ts but also all liabilities o Partnership between two or more people General not a legal entity each partner has equal control and unlimited liability where pro ts are taxed as income for partners Limited same as general but a partner is only held liable for the amount they put into the partnership 0 Corporation separate legal entity where owner39s liability is limited to what they contribute and the pro ts are taxed as income to the corporation 0 S Corporation considered a corporation under tax law but is taxed as a partnership if they follow special regulations 0 LLC Unincorporated taxed like a partnership but has limited liability like a corporation Specialized forms of business organizations 0 Joint venture relationship between 2 people or corporations created for a speci c business undertaking 0 Franchise agreement between an owner of a wellknown namelogotrademark and a person who sells goods or services under that certain trademark Ex McDonald39s 0 Joint Stock Company partnership agreement where members hold transferable shares while goods of the company remain in their original partners39 names Mix of a corporation and partnership Ch 36 Partnerships Nature Formation and Operation 0 Nature of the Relationship 0 An association of 2 people to carry on as coowners in a business for pro t 0 Partners share pro ts 0 Formation 0 Include names duration of partnership how everything will be divided 0 Can be formed by estoppel too Interactions between partners 0 Partner duties Duty of loyalty obedience and care 0 Partner rights Right to share in management inspect books compensation partnership property Ch 37 Partnerships Termination and Limited Partnership 0 Termination begins when a partnership dissolves After everything is distributed and the partnership is dissolved Dissolution the ceasing of a partnership The beginning of the end Winding Up completing un nished partnership business collecting and paying debts distributing partnership assets and taking inventory 0 formed by and agreement between members each of whom has limited liability while receiving the taxes like partnerships do but limits their liabilities like corporations Ch 38 Corporations Formation and Financing 0 Characteristics 0 A legal entity with rights like any human citizen would have 000 O A creature of the state with limited liability of shareholders Has perpetual existence and centralized management Has double taxation Considered domestic foreign or alien Potential problems forming a corporation 0 Remedies for defective incorporation De jure and de facto corporations Corporations by estoppel Piercing the corporate veil Corporate nancing 0 O Debtsecu esbonds Equity securities stocks Ch 39 Corporations Directors Of cers and Shareholders Terminology O O O O Quorum Minimum number of directors necessary to validate corporate directors39 meeting Proxy Provides authorization for third party to vote in place of shareholder at shareholders meeting Voting Trust Agreement between stockholder and trustee in which stockholder transfers their legal share titles to trustee Trustee is then responsible for voting for those shares Business ludoment Rule Provides that directors and of cers are not liable for decisions that harmed corporation if they were acting in good faith at time of decision Preemptive Rights right to buy more stocks to keep your for example 20 stake Dividends income from pro ts that shareholders get ln5pection Riohts right to look at business records with reasonable notice and without compensation Rioht to First Refusal when stocks are resold corporation gets rst offer and if they don39t want it they can resell it elsewhere Ch 42 Employment and Labor Law Fair Labor Standards Act FLSA 0 Everyone must be paid minimum wage Family and Medical Leave Act FMLA 0 You can leave for up to 12 weeks of unpaid leave for family problems Federal Unemployment Tax Act FUTA O Unemployment compensation Consolidated Omnibus Budget Reconciliation Act COBRA 0 If you lose or quit your job and you want to maintain your former coverage you have the right to do so for up to 29 months Employee Retirement Income Security Act ERISA 0 Sets standards for health plans Occupational Safety and Health Act of 1970 OSHA 0 Safe work environment Wagner Act of 1953 encourages labor unions and provides for quotcollective bargainingquot 0 Increased labor unions TaftHartley Act of 1947 Labor Management Relations Act 0 Limited labor unions after the Wagner Act came out with such force Don39t forget about the strikes pickets and boycotts Ch 43 Employment Discrimination Federal Employment Laws 0 Provide federal protection for employees states can provide more protection individually but this is the bare minimum Title VII of the Civil Rights Act 0 Protects employees against discrimination based on race religion gender etc Discrimination o Disparate treatment intentional o Disparate impact unintentional Pregnancy Discrimination Act of 1987 o Expanded from sex discrimination Defenses to claims under Title VII BFOQ o Allows employers discriminate based on gender religion or national origin if necessary If a job requires a lot of 1heavy lifting employers might not hire a girl over a guy Age Discrimination Act of 1967 ADEA o Says an employer can39t refuse to hire discharge or discriminate based on an employeeapplicant being 40 years old Equal Pay Act of 1963 o Says that an employer can39t pay one gender more or less than the other if other quali cations like skill level are equal
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