A Noted Professional Art Academy Has Founded an "Artists and Friends

question 16

Multiple Choice

A noted professional art academy has founded an "artists and friends" travel company specializing in tours for artists to scenic locales, using its faculty as traveling teachers.In addition, the art academy has purchased a framing company to make frames for academy art works, and to sell museum-quality framing services to the public.The art academy is engaging in diversification based on __________ relatedness.

• A) operational
• B) corporate
• C) intellectual
• D) constrained

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Definitions:

Foreign Subsidiary

A company owned or controlled by another company (the parent) but located and operating in a country different from the parent company.

Statement Of Retained Earnings

A financial statement that outlines the changes in retained earnings for a specific period, typically impacted by net income and dividends distributed.

Functional Currency

The currency of the primary economic environment in which an entity operates and conducts its business, crucial for financial reporting.

Straight-Line Method

An accounting method of depreciation that allocates an equal amount of depreciation each year over an asset's useful life.