______________ financing creates separate legal entities from the parent company. Since these entities are not wholly owned subsidiaries they can be hidden from the investors by keeping the entities off the financial statements.
A) Off-balance sheet
B) Off-shore
C) Cookie jar
D) Virtual

Question

Quizplus · Accepted Answer

Off-balance sheet financing creates separate legal entities from the parent company and keeps them off the financial statements, making it possible to hide them from investors. Offshore financing involves setting up companies in foreign countries with lenient financial regulations to avoid taxes and regulations. Cookie jar accounting is a practice where companies use accounting techniques to smooth out their earnings over several periods, and virtual financing does not refer to a specific type of financing.

______________ Financing Creates Separate Legal Entities from the Parent Company