Agency<span> is a </span>relationship<span> between a principal and an </span>agent<span> in which the principal confers his or her rights on the </span>agent<span> to act on principal's behalf. Such a </span>relationship <span>is based on an </span>agency<span> contract. The rights and duties of the </span>agent<span> and principal are in accordance with the express or implied terms of the contract.</span>
Answer:
True
Explanation:
In simple words, Relatively persistent flows of capital transfers and interactions between two or several entities are termed inter-organizational connections. These relationships are considered to be risky and often results in superior returns. It helps two firms to operate in a ritualistic partnership combined which does not force them to combine into a common company.
<u>Solution and Explanation:</u>
• The Significant dangers and awards of responsibility for products have been moved to the purchaser.
• The dealer holds neither proceeding with the administrative contribution to the degree generally connected with the possession nor powerful authority over the products sold.
• The measure of the income can be dependably estimated.
• It is plausible that the monetary advantages related to the exchange will stream to the vender.
• The cost brought about or to be acquired in regard to the exchange can be estimated dependably. In such conditions, any thought previously got for the offer of merchandise is perceived as an obligation. So therefore, receipt of $1000 received by Tesla as a reservation payment from a customer is recorded as short term liability in its books.
Entry shall be as follows:-
Bank/Cash A/c Dr. $1000
To Advances from Customers $1000
Answer:
1. What is the net working capital for the above company?
Net Working Capital will be 45
2. If the company pays back all of its accounts payable today using cash, what will its net working capital be (in million of USDs)?
Net Working Capital will be 45
3. If the company buys new property, plant and equipment today using its entire cash balance, what will its net working capital be (in million of USDs)?
Net Working Capital will be -1
Explanation:
1.
Net Working Capital = Total Current Asset - Total Current Liabilities
Net Working Capital = 89 - 44 = 45
2.
Current Asset after payment = 89 - 39 = 50
Current Liabilities after payment = 44 - 39 = 5
Net Working Capital = Total Current Asset - Total Current Liabilities
Net Working Capital = 50 - 5 = 45
3.
Current Asset after Purchase = 89 - 46 = 43
Current Liabilities after Purchase = 44 - 0 = 44
Net Working Capital = 43 - 44 = -1
