These are ACCA F4 Global (CL/LW) Corporate and Business Law MCQs for Part-D of the Syllabus “Formation and constitution of business organisations”.

These multiple-choice questions (MCQs) are designed to help ACCA F4 Global students to better understand the exam format. We aim to instill in students the habit of practicing online for their CBE exams. By doing so, students can reduce exam stress and prepare more effectively.

Please note:

Students should not attempt these MCQs until they have studied the entire chapter.
All questions are compulsory, so please do not skip any.

We hope that these MCQs will be a valuable resource for students preparing for the ACCA F4 Global (CL/LW) exam.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course:	ACCA – Association of Chartered Certified Accountants
Fundamental Level:	Applied Skills
Subject:	Corporate and Business Law
Paper:	F4 Global – CL/LW
Chapter:	Agency law
Chapter Number:	09 of the Practice and Exam Kit
Syllabus Area:	D – “Formation and constitution of business organisations”
Questions Type:	CBE MCQs
Exam Section:	Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part D of the Syllabus; “Formation and constitution of business organisations” of ACCA F4 Global (CL/LW) Corporate and Business Law Module.

Time

These MCQs are not time-bound. Take your time and solve them without stress. Pay proper attention and focus. Do not rush or hesitate.

Result

Students will get their F4 Global CBE MCQs Test results after they finish the entire test. They will also be able to see the correct and incorrect answers, as well as explanations for the incorrect questions.

Types of Questions

MCQs: Choose one from the given options.
Multiple choice: Choose all those answers which seem correct/ or incorrect to you, as per the requirement of the question. Keep your eye on the wording “( select all those which are correct/ or incorrect)“.
Drop-down: Select from the list provided.
Type numbers: Type your answer in numbers as per the requirement of the question.

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F4 (GLO) - Chapter 09 - Part D - MCQs

Course: ACCA - Association of Chartered Certified Accountants
Subject: F4 (LW/CL) (GLOBAL) - Corporate And Business Law
Syllabus Area: D - Formation and constitution of business organizations
Chapter in Kit: 09 - Agency law
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

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1 / 15

The purpose of an agency relationship is to form a business contract between which of the following parties?

Agent and principal

Agent and third party

Principal and third party

2 / 15

In order to form an agency relationship by express agreement, what form should the agreement take?

Either oral or written agreement

Written agreement only

Oral agreement only

3 / 15

'Holding out' is a key element of which form of agency?

Agency by necessity

Agency by estoppel

Agency by implied agreement

4 / 15

Which type of agent authority is derived from what is usual or customary in the circumstances?

Ostensible authority

Express authority

Implied authority

5 / 15

When combined, which types of agent authority are known as an agent's actual authority?

Express and apparent authority

Express and implied authority

Implied and ostensible authority

6 / 15

Unless circumstances indicate otherwise, which party is NOT liable under a contract properly formed under an agency agreement?

Agent

Third party

Principal

7 / 15

Which of the following statements regarding agency law is correct?

A principal may sue their agent if the third party is in breach of contract

An agent may not enforce a contract that they helped to form

A third party and principal do not need be in direct contact for a binding contract between them to be formed

8 / 15

Which type of agent runs an accountancy practice?

Company director

Promoter

Commercial agent

Partner

9 / 15

Which of the following statements concerning a principal ratifying a contract formed by an agent is correct?

The principal need not have had legal capacity when the contract was made

The principal need not have existed when the contract was made

At least half of the provisions of the contract must be ratified

The principal must communicate their ratification of the contract clearly to the third party

10 / 15

Which TWO types of agency are formed without the agent's consent?

Agency by implied agreement
Agency by express agreement
Agency by estoppel
Agency by ratification

1 and 2

2 and 3

3 and 4

1 and 3

11 / 15

In an emergency situation, a person may need to take control of another party's goods and deal with them appropriately.

What type of agency is this known as?

Agency by estoppel

Agency by necessity

Agency by ratification

Agency by implied agreement

12 / 15

Which of the following is included in an agent's ostensible authority?

The authority that is usual in the circumstances and what the principal impliedly gives the agent

The authority that the principal expressly gives the agent

The authority that the agent states that they have

The authority that the third party expects the agent to have

13 / 15

In which of the following circumstances will an agent's apparent authority arise?

Where a principal has represented a person to third parties as being their agent, despite not actually appointing the person as such

When the principal tells the agent orally what the limit of their authority is

When, without the principal being aware, an agent tells a third party what their authority is

What a third party determines the agent's authority is from what is usual in the circumstances

14 / 15

In which of the following circumstances will an agency relationship NOT be terminated?

Death of principal

Performance by the principal of their contractual obligations

Bankruptcy of principal

Insanity of principal

15 / 15

In which TWO of the following situations will an agent be liable on a contract?

Where it is usual business practice for the agent to be liable
Where the agent acts on their own behalf even though they purport to be acting for the principal
Where the principal intends for the agent to take personal liability
Where the third party agrees with the principal that the agent will be liable

1 and 3

3 and 4

2 and 3

1 and 2