If Money Is Commingled (Funds of Agent Mixed with Funds

question 112

True/False

If money is commingled (funds of agent mixed with funds of the principal), a violation of duty to account occurs only if the principal can show actual harm.

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Definitions:

Investments

Assets or items acquired with the goal of generating income or appreciating in value over time.

Indirect Method

A way of calculating cash flows for operational activities in the cash flow statement by starting with net income and adjusting for non-cash transactions.

Cash Flows

The total amount of money being transferred in and out of a business, especially affecting liquidity.

Operating Activities

Activities that relate directly to the primary operations of a company, such as manufacturing, distributing, marketing, and selling a product or service.