CLASSIFICATION OF AGENTS & PRINCIPALS

Question 1

Person who agrees to act as an agent without expectation of compensation

Answer 1

Gratuitous Agent

Question 2

An agent who is authorized to do a series of transactions for the principal for a continuing period of time and more implied authority

Answer 2

General Agent

Question 3

An agent who conducts some specific transaction for the principal over a limited period of time and has less implied authority

Answer 3

Special Agent

Question 4

Example of special agent

Answer 4

Broker;Factor;Lawyer;Auctioneer

Question 5

Factor is sometimes called

Answer 5

commission merchant

Question 6

Receives possession of some other person’s property to sell for a commission

Answer 6

Factor

Question 7

Person who agrees to act as an agent with expectation of compensation

Answer 7

Compensated Agent

Question 8

Person appointed by an authorized agent to act for the agent

Answer 8

Subagent

Question 9

A person whose existence and identity are known to the third party at the time of making the contract with the agent

Answer 9

Disclosed Principal

Question 10

Same as implied authority

Answer 10

Incidental authority

Question 11

Combination of express and implied authority

Answer 11

Actual Authority

Question 12

Another term for apparent authority

Answer 12

Ostensible authority

Question 13

Is a legally enforceable agreement

Answer 13

Contract

Question 14

A promise exchange for an act

Answer 14

Unilateral Contract

Question 15

Interdependent promises that cannot be separated

Answer 15

Indivisible Contract

Question 16

What are the four elements of a contract

Answer 16

Agreement;Consideration;Legal purpose;Competent parties

Question 17

Offer + acceptance =

Answer 17

mutual assent

Question 18

Request to change the taxpayer’s tax year must be filed on

Answer 18

IRS Form 1128

Question 19

Accrual method must be used by:

Answer 19

C corporation
Partnership that has C corporation as a partner
Tax shelter

Question 20

All items included in inventory s/b valued at either:

Answer 20

1. Cost

2. Lower of cost or method

Question 21

Unless a taxpayer uses the LIFO method, inventories may be valued at the

Answer 21

Lower of cost or method

Question 22

Taxpayer using the LIFO method is required to value inventory at

Answer 22

Cost

Question 23

The 2nd most important source of administrative tax authority is

Answer 23

Revenue rulings

Question 24

Easier to challenge in court

Answer 24

Revenue rulings

Question 25

While growing in the ground the tree is

Answer 25

Real property

Question 26

When the tree growing in the ground is cut into firewood it becomes

Answer 26

Personal property

Question 27

Conversion from real to personal property is called

Answer 27

Severance

Question 28

Conversion from personal property to real property is called

Answer 28

Attachment

Question 29

For federal tax purposes, all property is either classified as:

Answer 29

Ordinary income property or as capital asset

Question 30

Passive losses cannot be used for

Answer 30

Active Income such as Wages, Salaries

Portfolio Income such as Dividend, interest, royalties, annuities