Insolvency Automatically Results in Termination of an Agency Relationship

question 60

True/False

Insolvency automatically results in termination of an agency relationship.

---

Definitions:

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and a claim on part of its profits.

Journal Entry

A recording in the accounting ledger that notes all the financial transactions of a business.

Prepaid Insurance

An asset account that reflects the amount paid for insurance policies in advance, before the coverage period begins.

Accounts Receivable

Financial obligations customers have to a business for received services or goods that have not been paid for.