"When in Rome Do as the Romans Do" Best Describes

question 8

Multiple Choice

"When in Rome do as the Romans do" best describes which approach to a subsidiary's financial structure?

• A)conform to the parent company's norm
• B)conform to the local norm of the country where the subsidiary operates
• C)vary judiciously
• D)vary randomly

---

Definitions:

Real Accounts

Accounts that represent assets, liabilities, and equity, which are not closed at the end of the accounting period and carry over their balances.

Permanent Accounts

Accounts in the general ledger that are not closed at the end of an accounting year and whose balances are carried forward to the next year.

Balance Sheet Accounts

Accounts that report the financial position of a company, including assets, liabilities, and shareholders' equity, at a specific point in time.

Closing Process

The transfer process of converting temporary account balances to zero by transferring the revenue and expense account balances to the owner’s capital account, and transferring the owner’s drawing account balance to the owner’s capital account.