Assume That ABCO Is a U

question 3

Multiple Choice

Assume that ABCO is a U.S. multinational corporation. Its foreign subsidiaries must report income in their respective countries according to GAAP in those countries. How must ABCO report its consolidated financial statements?

• A) ABCO must choose any one country's accounting standards and combine the subsidiary reports into the parent company's statements using that one country's GAAP.
• B) Since the company is operating in several different countries, the International Accounting Standards must be used for the consolidated financial statements.
• C) Since ABCO is a U.S. corporation, U.S. generally accepted accounting principles, or GAAP, must be used for the consolidated financial statements.
• D) On the consolidated financial statements, each subsidiary's financial results must be shown in the currency of the country where the subsidiary is located.

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Definitions:

Shareholders

Individuals or institutions that legally own one or more shares of stock in a public or private corporation, giving them a share of ownership in the company.

Lag Measure

A performance indicator that shows the output of efforts, often revealing the success or failure of an initiative after it has been implemented.

Succession Management

A strategic process to identify and develop potential leaders within an organization to fill key positions.

External Coaches

Professional advisors hired from outside an organization to provide personalized coaching and development services to its employees.