Multiple Choice
Which type of accounting would a family most likely use to manage their finances when planning to purchase a home?
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1. Introduction to Accounting
Types of Accounting
Multiple Choice
An agent of a broker who is already acting as an agent of a principal is known as a:
A
Consignee
B
Sub-agent
C
Auditor
D
Principal
Verified step by step guidance1
Understand the concept of agency in financial accounting: An agent is a person authorized to act on behalf of a principal in business transactions.
Learn about the role of a sub-agent: A sub-agent is appointed by an agent to assist in carrying out the duties assigned by the principal. The sub-agent acts under the authority of the original agent.
Differentiate between the given terms: A consignee is a person to whom goods are shipped, an auditor is responsible for examining financial records, and a principal is the person who appoints the agent.
Focus on the relationship hierarchy: In this scenario, the broker is the agent of the principal, and the agent of the broker is referred to as a sub-agent.
Conclude that the correct term for an agent of a broker acting on behalf of a principal is 'Sub-agent'.
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