Because Those Who Cannot Legally Enter into Contracts Directly Cannot

question 90

Multiple Choice

Because those who cannot legally enter into contracts directly cannot do so indirectly through an agent, a principal must

• A)put an agency agreement into writing.
• B)proffer consideration to enter into an agency relationship.
• C)have contractual capacity to be a principal.
• D)employ only one agent at any given time.

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Definitions:

Liquidity

The ease with which assets can be converted into cash, indicating the financial health and operational efficiency of a business.

Receivables Ratio

A financial metric used to assess how efficiently a company uses its assets, particularly measuring how many times a company collects its average receivables within a certain period.

Vertical Analysis

An accounting method where each entry in a financial statement is listed as a percentage of another item, facilitating ratio analysis and comparisons.

Statement Of Financial Position

The statement of financial position, commonly known as the balance sheet, reports a company's assets, liabilities, and shareholders' equity at a specific point in time.