Certification in Supplier Diversity Practice Exam

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Get ready for the Supplier Diversity Certification Test. Prepare using flashcards and multiple choice questions, with hints and detailed explanations for each question. Ace your certification exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

In the context of agency, what is a principal's obligation regarding accounts?

To share all business decisions
To maintain proper records and accounts
To conduct regular audits
To provide financial guarantees

The correct answer is: To maintain proper records and accounts

The principal's obligation regarding accounts primarily revolves around the need to maintain proper records and accounts. This responsibility is crucial because it ensures transparency and accuracy in financial dealings, which is essential for effective management, compliance with laws, and fostering trust between the principal and agents or stakeholders involved. Proper records serve as a reliable basis for tracking financial performance, facilitating informed decision-making, and providing accountability for transactions. Although the other options may represent good practices, they aren't specifically mandated obligations of the principal in the context of agency. For instance, sharing all business decisions does not necessarily pertain directly to financial record-keeping, conducting regular audits typically falls under the responsibilities of external parties or internal audit functions rather than being an obligation of the principal itself, and providing financial guarantees involves risk management rather than just maintaining adequate financial documentation. Therefore, the emphasis on maintaining proper records and accounts aligns best with the principal's responsibilities in the context of agency.