In Relation to Each of the Following Statements,identify the Way

question 15

Essay

In relation to each of the following statements,identify the way in which the agency relationship has been established.
a.X consigned his automobile to Z with instructions to sell same immediately.Z was a mercantile agent.Z used the vehicle as security for a loan from Y,who knew nothing about X or his instructions to Z.
b.Z,a common carrier,transported perishable goods for X.The goods started to spoil,and Z was unable to contact X,who had left the country on an extended vacation.Z sold the goods to Y and received a reasonable price with regard to the condition of the goods.
c.X executes a power of attorney in favour of Z,authorizing Z to sell specific land described in the power of attorney.
d.X,without the authority of Z,sells certain of Z's furniture at a garage sale.Shortly after the sale,Z learns of it and approves of X's actions.

---

Definitions:

Indirect Method

A method used for the preparation of the cash flow statement which adjusts net income for changes in balance sheet accounts to calculate the cash from operating activities.

Operating Activities

These involve the primary, day-to-day actions that generate revenue and incur expenses in the normal course of business, reflected in the cash flows from operations section of the statement of cash flows.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or the business’s operating cycle, whichever is longer, such as cash, inventory, and receivables.

Direct Method

In cash flow reporting, a format that presents major classes of gross cash receipts and payments, providing transparency into a company's operating cash flows.