Suppose That There Are Significant Costs Associated with Coordinating a Subsidiary

question 43

Multiple Choice

Suppose that there are significant costs associated with coordinating a subsidiary with the parent organization and assessing the market potential of a foreign country.If there are also significant tariffs, in this case ________________is likely to be the lowest-cost method of supplying goods abroad.

• A) licensing
• B) subsidiary production
• C) direct exporting
• D) conglomerate integration

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Definitions:

Voucher System

A method of internal business control that involves a documented process for making disbursements and controlling expenditures.

Invoice Approval

The process of reviewing and verifying an invoice before it is paid to ensure that the charges are accurate and the goods or services were received.

Petty Cash Reimbursement

The process of refilling the petty cash fund to its set level after its funds have been used for small, incidental expenses.

Journal Entry

A record in accounting that represents a transaction with debits and credits documented in the appropriate accounts.