The Capacity to Be a Principal, and Thus to Act

question 2

True/False

The capacity to be a principal, and thus to act through an agent, depends on the capacity of the principal to do the act.

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Definitions:

Budgeted Balance Sheet

A financial statement projecting the future financial position of a company, showing expected assets, liabilities, and equity at a specific time.

Cash Budget

A budget projecting cash receipts and disbursements across a definite time frame, commonly employed to oversee liquidity and guarantee fiscal steadiness.

Uncollectible

Refers to accounts receivable that a company considers to be uncollectible from debtors and is likely to be written off as a bad debt expense.

Credit Sales

Sales where the payment is not received at the time of sale but is promised to be paid at a later date.