A Domestic and a Foreign Firm Sharing the Cost of Developing

question 16

Multiple Choice

A domestic and a foreign firm sharing the cost of developing new products or building production facilities in a foreign country is called a ________.

• A)franchising agreement
• B)joint venture
• C)foreign subsidiary
• D)brokering agreement
• E)production agreement

---

Definitions:

Periodic inventory system

A periodic inventory system is a method of inventory valuation where the inventory is updated and cost of goods sold is calculated at the end of a specific accounting period.

Ending inventory

The total value of all the goods still available for sale at the end of an accounting period.

Gross profit

The financial metric indicating the difference between revenue and the cost of goods sold, reflecting the core profitability of product sales.

Perpetual inventory system

An accounting method that records the sale or purchase of inventory immediately through computerized point-of-sale systems and enterprise asset management software.