Explain the worldwide and territorial approaches of national taxation. The authors state that the United States uses both approaches. How can this be? Give an example of each taxation approach
What will be an ideal response?
Answer: The worldwide approach taxes the income of firms based on their place of residence rather than on where the income was earned. Thus, a U.S. based MNE will owe U.S. taxes on income earned in, say, Britain. The territorial approach to taxation taxes all of the income earned within the borders of the country by both domestic and foreign-based firms. Thus, a British-based firm making sales in New York will owe taxes in the U.S.
Through a series of bilateral tax agreements the U.S. and several trading partners have tried to workout tax issues. Generally, the taxes a U.S. based MNE pays abroad will help offset any required taxes the firm might have on funds remitted to the United States.
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Alpha Company uses its sales invoices for posting perpetual inventory records. Inadequate control activities over the invoicing function allow goods to be shipped that are not invoiced. The inadequate control activities could cause an:
A. overstatement of revenues and receivables and an understatement of inventory. B. understatement of revenues, receivables, and inventory. C. overstatement of revenues, receivables, and inventory. D. understatement of revenues and receivables and an overstatement of inventory.
What is a marketing strategy? How do marketing strategies help firms?
What will be an ideal response?
A firm is able to meet current demand. If it adopts a lead capacity strategy, then it is probably making the assumption that demand will increase in the future
Indicate whether the statement is true or false.
Discuss the importance of periodic reporting and the time period assumption.
What will be an ideal response?