A Canadian Firm with a U

question 52

Multiple Choice

A Canadian firm with a U.S. subsidiary and a U.S. firm with a Canadian subsidiary agree to a parallel loan agreement. In such an agreement, the Canadian firm is making a/an ________ loan to the ________ subsidiary while effectively financing the ________ subsidiary.

• A) indirect; U.S.; Canadian
• B) indirect; Canadian; U.S.
• C) direct; U.S.; Canadian
• D) direct; Canadian; U.S.

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Definitions:

Period Costs

Expenses that are not directly tied to the production process and are expensed in the accounting period in which they are incurred.

Nonmanufacturing Costs

Nonmanufacturing costs are expenses not directly related to the production of goods, including selling, general, and administrative expenses.

Selling

The process of persuading someone to buy a product or service, a fundamental activity in business.

Administrative

Pertaining to activities related to the management and general operations of an organization, often involving tasks like paperwork, communication, and office upkeep.