Which of the Following Is an Advisable Step for a Principal

question 35

Multiple Choice

Which of the following is an advisable step for a principal to take after terminating an agency relationship?

• A) Ensure the termination agreement is put into writing.
• B) Ensure that third parties are notified.
• C) Ensure an indemnity agreement is in place.
• D) Ensure the agent is informed in writing of the termination.

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Definitions:

Interest Revenue

Income earned on investments, loans, or accounts receivable that is generated from the interest charged.

Annual Return

The percentage of increase or decrease in the value of an investment over a one-year period, including dividends and appreciation.

Direct Financing Lease

A type of lease where the lessor records receivables equal to the net investment in the lease and recognizes income from interest over the lease term.