Which of the Following Is True Regarding a Corporation That

question 64

Multiple Choice

Which of the following is true regarding a corporation that conducts business in a foreign country using a branch office?

• A) A branch office is a separate legal entity.
• B) The corporation is liable for the contracts of a branch office, but not for torts committed by the personnel of a branch office.
• C) The corporation is liable for torts committed by the personnel of a branch office, but is not liable for the contracts of a branch office.
• D) A corporation is not liable for torts committed by the personnel of a branch office, or for the contracts of a branch office.
• E) A corporation is liable for torts committed by the personnel of a branch office, and also for the contracts of a branch office.

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Definitions:

Reportable Operating Segments

Distinct parts of a business that are analyzed separately by the management, for the purpose of making decisions and assessing performance.

Financial Statements

Financial statements are official records that outline the financial activities and condition of a business, entity, or individual, including the balance sheet, income statement, and statement of cash flows.

External Customers

Individuals or entities that purchase goods or services from a business but are not part of the same organization.

Revenue Test

A criterion used to determine whether a particular amount of revenue can be recognized in a company's financial statements.