It Is Often Necessary or Desirable for a Person or Firm

question 8

Multiple Choice

It is often necessary or desirable for a person or firm to be represented by another in business or personal dealings with third parties. This relationship is called a(n) :

• A) employer-employee relationship.
• B) principal-agency relationship.
• C) title-agency relationship.
• D) third party-agent relationship.

---

Definitions:

Double Taxation

A taxation principle referring to income taxes paid twice on the same source of earned income, it can occur when income is taxed at both the corporate level and personal level.

Debt Obligations

The amount of money that a company or individual must repay to lenders, including both the principal and interest.

Distinct Legal Entity

Refers to a business that is legally considered separate from its owners, meaning it can own property, incur debts, and be sued independently.

Corporation

A legal entity that is separate and distinct from its owners, offering limited liability to its shareholders, and having the ability to own property, enter contracts, and sue or be sued.