Under the "Procuring Cause" Rule, When the Agent Is the Primary

question 13

Multiple Choice

Under the "procuring cause" rule, when the agent is the primary factor in a purchase, the agent _____.

• A) may be entitled to a commission regardless of who eventually completes the sale
• B) is not entitled to compensation after termination of the agency relationship
• C) is not entitled to compensation if the principal completes the purchase
• D) may be entitled to compensation only if he completes the sale

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Definitions:

FOB Shipping Point

This refers to a shipping term where the buyer assumes responsibility for the goods the moment they leave the seller’s premises.

Accounts Payable

A liability account that records amounts the company owes to suppliers or creditors for purchases or services received on credit.

Physical Inventory Count

A physical inventory count is the process of manually counting all merchandise or stock in a business to verify records and manage inventory levels.

Cost Of Inventory

The total cost incurred to acquire, produce, and place inventory items available for sale, including purchase price, shipping, handling, and storage.