The Functional Currency Approach Adopted by FASB 52 Requires

question 42

Multiple Choice

The functional currency approach adopted by FASB 52 requires:

• A)​separate statements be maintained by the domestic parent company and the foreign branch both in their own currencies
• B)​separate statements be maintained by the domestic parent company and the foreign branch with the foreign branch translated into the functional currency
• C)​results from foreign currency changes to be ignored
• D)​a focus on whether the domestic reporting entity's cash flows will be indirectly or directly affected by changes in the exchange rates of the foreign entity's currency

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Definitions:

Electron

A negatively charged subatomic particle present in every atom that primarily facilitates the flow of electricity in solid materials.

Boron

A metalloid element with the symbol B, essential for plant growth and used in fiberglass and borosilicate glass.

Protons

Positively charged subatomic particles found in the nucleus of an atom, contributing to the atom's mass and charge.

Ca

The elemental symbol for Calcium, a soft gray alkaline earth metal with atomic number 20.