Which of the Following Is an Example of a Principal/agent

question 49

Multiple Choice

Which of the following is an example of a principal/agent relationship?

• A)Banks lending money to start-up companies.
• B)An investment banker investing the client's money into different securities.
• C)Advance booking for a car after watching its promos at a car show.
• D)Investing your money in fixed-return deposits and government securities.

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Definitions:

Operating Segments

Components of an enterprise about which separate financial information is available and evaluated regularly by the chief operating decision-maker in deciding how to allocate resources.

Revenue Test

A criterion used to gauge the amount of revenue generated by a company, project, or product, crucial for decision-making and financial analysis.

Operating Segments

Components of a business that engage in business activities from which it may earn revenues and incur expenses, often reported in financial statements for diversified companies.

LIFO Method

"Last In, First Out," an inventory valuation method where the most recently purchased items are the first to be sold, affecting the cost of goods sold and inventory valuation.