Which of the Following Defines a Foreign-Based Entity That Uses

question 23

Multiple Choice

Which of the following defines a foreign-based entity that uses a functional currency different from the local currency?
I.A U.S.subsidiary in Britain maintains its accounting records in pounds sterling,with the majority of its transactions denominated in pounds sterling.
II.A U.S.subsidiary in Peru conducts virtually all of its business in Latin America,and uses the U.S.dollar as its major currency.

• A) I.
• B) II.
• C) Both I and II.
• D) Neither I nor II.

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Definitions:

Deductions

Amounts that are subtracted from gross income when calculating taxable income, including expenses, allowances, or specific exemptions.

Exemptions

Specific allowances that relieve individuals, organizations, or products from fulfilling certain conditions or requirements, often for taxes or regulations.

Personal Income Tax

A tax levied on individuals or households based on their total income from various sources, including wages, salaries, and investments.

Taxable Income

The portion of an individual's or corporation’s income that is subject to taxes according to the laws and regulations of a particular jurisdiction.