Which of the Following Is NOT an Example of an Agency

question 16

Multiple Choice

Which of the following is NOT an example of an agency arrangement where the selling entity would recognise revenue on a net basis?

• A) A travel agent selling an airline ticket to a customer, charging the customer $200 and remitting $180 to the airline.
• B) A supermarket selling groceries to a customer for $110 and remitting $10 GST to the government.
• C) A distributor receiving stock from its supplier on a sale-or-return basis. The sales price per unit is $120 and the cost per unit is $75
• D) A licensed hotel selling keno tickets to customers for $5.00 and remitting $4.50 per ticket to the state gaming authority.

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Definitions:

Warehouse

A large building where goods are stored before they are distributed to stores or consumers.

Principal-Agent Problem

A dilemma in economics where one party (the agent) is expected to act in the best interest of another party (the principal) but may have a motivation to act in their own interest instead.

Ownership

The legal right or state of having possession and control over property, which can be an object, land/real estate, intellectual property, or a corporate entity.

Control

The power to influence or direct people's behavior or the course of events.