When Entering a Foreign Market, Mountain Stream Brewery Entered into an Agreement

question 302

Multiple Choice

When entering a foreign market, Mountain Stream Brewery entered into an agreement with a local firm to brew and market Mountain Stream's beer. This is an example of

• A) licensing.
• B) franchising.
• C) foreign direct investment.
• D) foreign subsidiaries.

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Definitions:

Discount on Bonds Payable

The discrepancy between a bond's nominal value and its market price when the bond is sold below its nominal value.

Journal Entry

A record of a financial transaction in an accounting system, consisting of debits and credits to maintain the double-entry accounting.

Discount on Bonds Payable

The gap between the nominal value of a bond and the price it is sold at when this price is lower than the bond's nominal value.

Redeems

The act of repaying or buying back something, such as a company repurchasing its own shares or a bond issuer paying back the principal at maturity.