Financial Performance Evaluation of a Foreign Subsidiary or Affiliate Usually

question 30

Multiple Choice

Financial performance evaluation of a foreign subsidiary or affiliate usually is based on _____.

• A) profits and assets
• B) assets and return on investment
• C) profit and return on investment
• D) assets and owners' equity

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Definitions:

Retained Earnings

The portion of a company's profit that is held back and not distributed to shareholders, used for reinvestment or debt payment.

Dividend

A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Expense Matching

An accounting principle that states expenses should be recorded in the same period as the revenues they helped to generate, to accurately match income with expenses.

Cause and Effect

A relationship where one event (the cause) leads to the outcome of another event (the effect).