The Key Feature of an Agency Relationship Is That

question 27

Multiple Choice

The key feature of an agency relationship is that:

• A)the principal will always make decisions that are in the best interests of the agent.
• B)a company will allow another firm to take on its name,and act as an agent in doing business.
• C)the decisions by the agent will always improve the position of the owners of a firm.
• D)one party passes the responsibility for making decisions to another party.

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Definitions:

Cost of Goods Sold

Costs directly related to the fabrication of goods a business sells, incorporating both materials and labor.

LIFO Inventory Valuation

An inventory costing method that assumes the last items placed in inventory are the first ones sold.

Perpetual Inventory System

A method of accounting for inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management.

Sales Revenue

Sales revenue refers to the income received from the sale of goods or services before any costs or expenses are deducted, serving as a primary source of business income.