Which of the Following Is True of a Principal-Independent Contractor

question 80

Multiple Choice

Which of the following is true of a principal-independent contractor relationship?

• A) Principals are bound by the authorized contracts of their independent contractors.
• B) Independent contractors cannot be authorized by principals.
• C) Independent contractors are employees of the principals.
• D) Principals cannot directly employ independent contractors.

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Definitions:

Monetary Assets

Monetary assets are financial assets that are cash or can be quickly converted into a known amount of cash with minimal risk of changes in value.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Notes Receivable

Financial assets representing money owed to the holder of the note, usually in the form of a formal written agreement.

Common Stock Account

An equity account on a company's balance sheet representing the value of shares issued by the company and held by shareholders.