How Is a Foreign Subsidiary Different from a Foreign Branch

question 22

Multiple Choice

How is a foreign subsidiary different from a foreign branch of a domestic corporation?

• A) Subsidiaries always generate more foreign source income than branches do.
• B) The subsidiary is a company incorporated in the foreign country, whereas a branch is not a separate corporation.
• C) A subsidiary is created to manufacture and distribute products in foreign markets, whereas a branch's only function is sales in the foreign market.
• D) The income of a subsidiary is taxable by the country where it is located, but branch income is not subject to tax by the country where it does business.

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Definitions:

Amphetamines

Amphetamines are a type of stimulant medication used to treat conditions like ADHD and narcolepsy by increasing focus, attention, and energy levels through central nervous system activation.

Dopamine

A neurotransmitter involved in controlling the brain's reward and pleasure centers, as well as regulating movement and emotional responses.

Frontal Cortex

The part of the brain located in the front of the head, responsible for decision making, problem solving, and controlling behavior.

Stimulants

Substances that increase activity in the central nervous system or body, often enhancing alertness and energy.