Read the following and answer the related questions that follow it. Auric plc is a mining company,...

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Accounting

Read the following and answer the related questions that followit.
Auric plc is a mining company, whose main business consists ofopen cast
mining. It has Articles of Association that are in the form ofmodel Articles. The
board of directors includes Penny, Howard and Emily.
At a recent board meeting, the directors considered an offerfrom Trek Mines
plc to sell land adjoining one of Auric plc’s mining sites for£550,000. The
board of Auric plc decided that the company should not accept theoffer as it
doubted whether it could raise the finance needed to buy the land.Penny then
formed her own company, Gold Ltd, which purchased the land for£550,000. At
the same meeting, the directors discussed a proposed contract withTexas plc,
which is being considered to survey a plot of land recentlypurchased by Auric
plc. Howard owns 10% of the shares in Texas plc, but did not revealhis interest
at the board meeting.

Emily has an arrangement with Comic plc whereby she receives a10%
commission for all orders placed with it by Auric plc. Six monthsago, Auric plc
purchased some drilling equipment from Comic plc for £100,000, forwhich
Emily was paid £10,000 commission.
The shareholders of Auric plc have discovered these facts, andthey have
passed an ordinary resolution directing the board of directors tocommence
legal proceedings against Penny, Howard and Emily.
1.
Which one of the following generally has the customary authorityto bind the company?
Group of answer choices
A non-executive director
Any individual director
The chairperson
The managing director
2.
The duty of care, skill and diligence contained in s174 wasinspired by which offence?
Group of answer choices
Wrongful trading (s214(4) IA 1986)
Insider dealing
Market abuse
Fraudulent trading
3.
The duty of care, skill and diligence is measured by looking atthe objective element - the care, skill and diligence of thereasonable director; and the subjective element looking at theactual director in question's knowledge and experience.
Group of answer choices
True
False
4.
Two non-executive directors were found to be negligent inDorchester Finance v Stebbings this was because :
Group of answer choices
A director used two blank cheques handed to him by the twonon-executives and he used them to misappropriate funds
A director signed two blank cheques handed to him by the twonon-executives who used them to misappropriate funds
The non-executive directors were accountants and should haveknown better
The non-executive directors were accountants
5.
How was the director found negligent in Re D'Jan of LondonLtd?
Group of answer choices
The form was filled in by his insurance broker and therefore hedid not need to check it
He didn't check the renewal insurance form before signing it
He showed reasonable diligence when he signed the form
A director must always read the whole of every document which hesigns

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1 Which one of the following generally has the customary authority to bind the company The managing partner 2 The duty of care skill and diligence contained in s174 was inspired by See Answer

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Read the following and answer the related questions that followit.Auric plc is a mining company, whose main business consists ofopen castmining. It has Articles of Association that are in the form ofmodel Articles. Theboard of directors includes Penny, Howard and Emily.At a recent board meeting, the directors considered an offerfrom Trek Minesplc to sell land adjoining one of Auric plc’s mining sites for£550,000. Theboard of Auric plc decided that the company should not accept theoffer as itdoubted whether it could raise the finance needed to buy the land.Penny thenformed her own company, Gold Ltd, which purchased the land for£550,000. Atthe same meeting, the directors discussed a proposed contract withTexas plc,which is being considered to survey a plot of land recentlypurchased by Auricplc. Howard owns 10% of the shares in Texas plc, but did not revealhis interestat the board meeting.Emily has an arrangement with Comic plc whereby she receives a10%commission for all orders placed with it by Auric plc. Six monthsago, Auric plcpurchased some drilling equipment from Comic plc for £100,000, forwhichEmily was paid £10,000 commission.The shareholders of Auric plc have discovered these facts, andthey havepassed an ordinary resolution directing the board of directors tocommencelegal proceedings against Penny, Howard and Emily.1.Which one of the following generally has the customary authorityto bind the company?Group of answer choicesA non-executive directorAny individual directorThe chairpersonThe managing director2.The duty of care, skill and diligence contained in s174 wasinspired by which offence?Group of answer choicesWrongful trading (s214(4) IA 1986)Insider dealingMarket abuseFraudulent trading3.The duty of care, skill and diligence is measured by looking atthe objective element - the care, skill and diligence of thereasonable director; and the subjective element looking at theactual director in question's knowledge and experience.Group of answer choicesTrueFalse4.Two non-executive directors were found to be negligent inDorchester Finance v Stebbings this was because :Group of answer choicesA director used two blank cheques handed to him by the twonon-executives and he used them to misappropriate fundsA director signed two blank cheques handed to him by the twonon-executives who used them to misappropriate fundsThe non-executive directors were accountants and should haveknown betterThe non-executive directors were accountants5.How was the director found negligent in Re D'Jan of LondonLtd?Group of answer choicesThe form was filled in by his insurance broker and therefore hedid not need to check itHe didn't check the renewal insurance form before signing itHe showed reasonable diligence when he signed the formA director must always read the whole of every document which hesigns