Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Which of the following best describes an express agency relationship in accounting?

An agency relationship that is implied by the actions or conduct of the parties involved.

An agency relationship that is established through the principal's ratification of the agent's unauthorized acts.

An agency relationship that arises automatically by law without any agreement.

An agency relationship that is created by a written or spoken agreement between the principal and the agent.

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Verified step by step guidance

Step 1: Understand the concept of an express agency relationship. In financial accounting, an express agency relationship is formed when there is a clear and explicit agreement between the principal and the agent. This agreement can be either written or spoken.

Step 2: Differentiate express agency from other types of agency relationships. For example, implied agency arises from the actions or conduct of the parties, while agency by ratification occurs when the principal approves the agent's unauthorized acts after they have been performed.

Step 3: Recognize that express agency requires mutual consent and a clear agreement. Both parties must agree to the terms of the relationship, and the principal explicitly authorizes the agent to act on their behalf.

Step 4: Note that express agency does not arise automatically by law or through actions alone. It is intentionally created through communication and agreement between the principal and the agent.

Step 5: Apply this understanding to the problem. The correct description of an express agency relationship is: 'An agency relationship that is created by a written or spoken agreement between the principal and the agent.'