📏CPA EXAM PREP

Business Law

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Question

How is a security interest usually perfected?

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Answer

By filing a financing statement, or by possession/control.

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Question

How is actual authority created in an agency relationship?

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Answer

By the principal’s express words or implied necessity.

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Question

Why can apparent authority bind a principal even without actual authority?

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Answer

The principal’s manifestations reasonably cause third-party reliance.

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Question

What duty does an agent owe the principal that is central to agency law?

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Answer

Loyalty, obedience, reasonable care, and accounting.

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