When a US Subsidiary in Another Country Remits Profits Back to Its

question 72

Multiple Choice

When a U.S. subsidiary in another country remits profits back to its parent in the U.S., the receipt of profits is recorded in the ________.

• A) income receipts account and given a plus sign
• B) income receipts account and given a minus sign
• C) income payments account and given a plus sign
• D) income payments account and given a minus sign

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Definitions:

Issuing Agency

The government or corporate entity that issues securities for the purpose of raising capital.

Servicing Fee

A fee charged by a company for servicing an account, loan, or investment, covering the costs of maintaining the account or investment.

Accounting Scandals

Instances where companies have engaged in fraudulent accounting practices to manipulate financial statements and mislead investors and stakeholders.

Agency Problem

A conflict of interest arising between principals, such as shareholders, and agents, such as company executives, due to differing goals.