The principal is the person or firm who hires an agent to act on its behalf in conducting business activities, such as buying or selling goods or services. Option A correctly defines the principal as the party that contracts for the services of the agent in its own behalf. The other options do not accurately define the concept of a principal in business.

Solved

A Principal

Question 22

Multiple Choice

A principal:

A) Is the manufacturer or other person or firm who contracts for the services of the agent in its own behalf
B) Is a firm carrying a very narrow line of services and supporting that with technical expertise and consultative selling
C) Is a firm that provides no buyer financing or delivery
D) Is a firm that buys products from a supplier but never takes physical possession
E) Is a manufacturer or other firm who does not buy or own the goods it sells

Correct Answer: