Centralization of cash management allows the parent to offset subsidiary payables and receivables in a process called:

Question

Quizplus · Accepted Answer

The process described in the question is called netting. Netting is a cash management technique where a central company offsets subsidiaries' payables and receivables against each other, reducing the overall amount of cash that needs to be transferred between companies. This simplifies cash management and reduces transaction costs. Therefore, the correct answer is D.

Centralization of Cash Management Allows the Parent to Offset Subsidiary