Rica, the president of XYZ Corporation was authorized by the Board of Directors of XYZ Corporation to obtain loan from ABC Bank and to sign documents in behalf of the corporation. Rica personally negotiated for the loan and got the loan at very low interest rates. Upon maturity of the loan, XYZ Corporation was unable to pay. Which statement is most accurate? a. Because Rica was personally acting in behalf of the Corporation, she can held personally liable b. If XYZ Corporation cannot pay, Rica can be held subsidiarily liable c. Rica, as President, cannot be personally held liable for the obligation of the corporation even though she signed all the loan documents, because the loan was authorized by the Board d. ABC Bank can choose as to who it wants to hold liable for the loan
Rica, the president of XYZ Corporation was authorized by the Board of Directors of XYZ Corporation to obtain loan from ABC Bank and to sign documents in behalf of the corporation. Rica personally negotiated for the loan and got the loan at very low interest rates. Upon maturity of the loan, XYZ Corporation was unable to pay. Which statement is most accurate? a. Because Rica was personally acting in behalf of the Corporation, she can held personally liable b. If XYZ Corporation cannot pay, Rica can be held subsidiarily liable c. Rica, as President, cannot be personally held liable for the obligation of the corporation even though she signed all the loan documents, because the loan was authorized by the Board d. ABC Bank can choose as to who it wants to hold liable for the loan
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Rica, the president of XYZ Corporation was authorized by the Board of Directors of XYZ Corporation to obtain loan from ABC Bank and to sign documents in behalf of the corporation. Rica personally negotiated for the loan and got the loan at very low interest rates. Upon maturity of the loan, XYZ Corporation was unable to pay. Which statement is most accurate?
a. Because Rica was personally acting in behalf of the Corporation, she can held personally liable
b. If XYZ Corporation cannot pay, Rica can be held subsidiarily liable
c. Rica, as President, cannot be personally held liable for the obligation of the corporation even though she signed all the loan documents, because the loan was authorized by the Board
d. ABC Bank can choose as to who it wants to hold liable for the loan
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education