When an Agent, Acting Within the Scope of His or Her

question 26

True/False

When an agent, acting within the scope of his or her authority, contracts with a third party, a disclosed principal is liable to the third party.

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Definitions:

Receiving Report

A document used to confirm the receipt of goods delivered, typically matched against the purchase order to ensure accuracy.

Purchase Order

The document authorizing the purchase of inventory from an approved vendor.

Sales Invoice

A document issued by a seller to a buyer, detailing a transaction and requesting payment, itemizing the products or services provided and their prices.

Work in Process

Inventory items that are currently in the production process but are not yet completed products.