A Principal Is Not Bound by Statements Made by an Agent

question 5

True/False

A principal is not bound by statements made by an agent during the transaction of business that is within the scope of the agent's authority.

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Definitions:

Deposit in Transit

A sum of money transferred or sent to a bank account but not yet recorded in the account's available balance, often due to processing times.

Outstanding Check

A check that has been written by a company but has not yet been cashed or cleared by the bank.

Accounting Records

Documents and books that capture a company's financial transactions, including journals, ledgers, and financial statements.

Cash Account

An account where all transactions are made in cash, including receipts and payments.