Assume That Subsidiaries X and Y Often Trade with Each

question 45

Multiple Choice

Assume that Subsidiaries X and Y often trade with each other. Assume that Subsidiary X has excess cash while Subsidiary Y is short on cash. How can Subsidiary X help out Subsidiary Y?

• A) X should lag its payments sent to Y to pay for imports from Y.
• B) X should request that Y lead its payments to be sent for goods that Y sent to X.
• C) A and B
• D) None of the above

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Definitions:

Time-Driven

A method or approach that is based on the allocation of time to tasks or activities, often used in costing methodologies to allocate resources or in project management for scheduling.

Activity-Based Costing

A method of allocating overhead and indirect costs to specific products or activities based on their consumption of resources.

Processing Orders

The activities involved in fulfilling customer requests for goods or services.

Time-Driven

A term related to activity-based costing that assigns costs based on the amount of time required to complete a task.