A Principal Has the Power to Terminate an Agency Relationship

question 62

True/False

A principal has the power to terminate an agency relationship whether or not they have the legal right to terminate that relationship.

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Definitions:

Accounting Information System

A system designed to collect, store, manage, process, retrieve, and report financial data for decision making.

Flexibility Principle

In accounting, it refers to the principle that financial reporting and its practices should be flexible enough to adapt to changes in the business environment or in accounting standards.