When a USSubsidiary in Another Country Remits Profits Back to Its Parent

question 30

Multiple Choice

When a U.S.subsidiary in another country remits profits back to its parent company 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:

Adjustment

A modification made to rectify the balance of an account, to reflect accrued expenses or revenues, or to correct errors.

Balance Sheet

An accounting summary showing the assets, liabilities, and owner's equity of a company on a given date.

Retainer Fee

A payment made in advance to hire or retain professional services, ensuring availability over a specific period.

Earned

Income or revenue that has been generated from business activities or investments, substantiated by the delivery of goods or services.