Scenario: ABC Software ABC Software Is a Producer of Educational Software for Children

question 100

Multiple Choice

Scenario: ABC Software
ABC Software is a producer of educational software for children below the age of twelve. The company has operations in Switzerland and would like to expand its foreign operations with a new facility in China.
-ABC Software has had difficulty obtaining funds to expand.A friend of the CEO recommends that the company should explore an offshore financial center,which ________.

• A) is a country or territory whose financial sector features very few regulations and few, if any, taxes
• B) tends to be characterized by political and economic instability making, it is an inexpensive but risky source of funds
• C) typically lends money to companies that have had difficulty getting financing elsewhere because of poor credit records
• D) is a financial center located in a resort community and is characterized by poor telecommunications infrastructure

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Definitions:

Operating Leases

An agreement that allows for the use of an asset but does not grant ownership rights of the asset to the lessee.

Loss Contingency

A potential financial liability that may occur depending on the outcome of a future event.

IFRS

International Financial Reporting Standards, a set of global accounting standards developed by the International Accounting Standards Board.

U.S. GAAP

Generally Accepted Accounting Principles in the United States, a common set of accounting rules and standards for financial reporting.