According to AASB 121 the Effects of Changes in Foreign

question 16

Multiple Choice

According to AASB 121 The Effects of Changes in Foreign Exchange Rates, the currency of the primary economic environment in which the foreign entity operates is the:

• A) local currency.
• B) foreign currency.
• C) functional currency.
• D) presentation currency.

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Definitions:

Planning Budget

A budget prepared for a specific level of activity, outlining expected revenues, expenses, and resource requirements.

Employee Salaries

Regular payments made to employees for performing their job duties.

Service Company

A business that earns revenue by providing intangible products or services, as opposed to selling physical goods.

Indirect Labor

The labor costs of janitors, supervisors, materials handlers, and other factory workers that cannot be conveniently traced to particular products.