Dan Heath Is the Majority Owner of Plain Truth Advertising

question 40

Multiple Choice

Dan Heath is the majority owner of Plain Truth Advertising.He hires Shirley Downs as the chief executive officer (CEO) .In terms of an economic model,Mr.Heath is the ______ and Ms.Downs is the ______.

• A)agent; principal.
• B)principal; agent.
• C)principal; intermediary.
• D)agent; intermediary.

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Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholder equity at a specific point in time.

Statement of Financial Position

Another term for the balance sheet, emphasizing its role in showing the financial status of an entity at a point in time.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, whichever is longer.

Order of Liquidity

The arrangement of assets on a balance sheet in order of the time it would typically take to convert them into cash.