Question

Greta, an agent, receives money from clients of Wayne, her principal, on the fifteenth of each month. In the absence of an agreement, how frequently must Greta account to Wayne for the money she receives?

1) Typically during the financial year end
2) Immediately upon receiving the money
3) Within a year of receiving the money
4) Within a reasonable period of time after the money is received

Answer 1

An agent like Greta must account to her principal Wayne within a reasonable period of time after receiving money, considering the nature of the transactions and industry standards. Therefore, the correct option is 4.

Step-by-step explanation:

As an agent, Greta has a fiduciary duty to Wayne, her principal, which includes accounting for any money she receives on his behalf. The frequency at which an agent must account to their principal in the absence of an agreement would be within a reasonable period of time after the money is received. This is because neither immediate accounting upon receiving the money nor waiting for as long as a year or until the financial year-end is practical or typical in agency relationships. What constitutes a reasonable period can depend on the nature of the transactions, industry standards, or other circumstances, but it typically implies a prompt and timely reporting that does not unduly delay the principal's insight into the state of his affairs.