The Securities and Exchange Commission Requires That Subscriptions Receivable Be

question 51

Multiple Choice

The Securities and Exchange Commission requires that Subscriptions Receivable be disclosed on the financial statements filed with it as a(n)

• A)current asset as long as collection is to be made within one year or the normal operating cycle, whichever is longer
• B)other asset if collection is to be made beyond one year from the date of the financial statements
• C)contra-accounts receivable account
• D)contra-stockholders' equity account

---

Definitions:

Agency Relationship

represents a legal arrangement where one party, the agent, acts on behalf of another party, the principal, in dealing with third parties.

Express Authority

Explicitly given power or authority to an agent or representative by a principal to perform specific acts or functions on their behalf.

Apparent Authority

A doctrine in contract law that allows a third party to hold a principal liable for the acts of an agent, if the principal's actions lead the third party to reasonably believe that the agent is authorized.

Settlement Approval

The process by which a court reviews and approves a settlement agreement between parties in a lawsuit.