When a Principal Is Partially Disclosed

question 45

Multiple Choice

When a principal is partially disclosed

• A)the agent and principal will be jointly and severally liable on the contract.
• B)the agent and principal will be only jointly liable on the contract.
• C)only the principal can be liable.
• D)only the agent is liable.

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Definitions:

Impairment Losses

Financial losses recorded when an asset's market price drops below its book value.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its identifiable net assets, representing future economic benefits from assets not separately identified.

Reversed

In accounting, this refers to the action of undoing or negating a journal entry that was previously made, often because it was an error.

Change In Estimate

An adjustment made to the accounting records to reflect new information or subsequent changes in judgments regarding financial statement estimates.