Through ________, a Subsidiary Can Defer Payment for Goods and Services

question 23

Multiple Choice

Through ________, a subsidiary can defer payment for goods and services received from its parent firm.

• A) trade credits
• B) royalty payments
• C) fronting loans
• D) dividend remittances

---

Definitions:

Cash

A form of liquid asset that includes currency and other easily accessible bank balances.

Prepaid Insurance

Refers to payments made in advance for insurance coverage, recorded as an asset on the balance sheet until the period to which the insurance relates.

Historical Cost

The original monetary value of an asset or transaction, without adjusting for inflation or market valuation changes.

Merchandise Inventory

The total cost of all the goods a company intends to sell, including items purchased for resale.