International Accounting Standards Define Functional Currency As

question 50

Multiple Choice

International accounting standards define functional currency as:

• A) the currency of the parent company.
• B) the currency of the primary economic environment in which the subsidiary operates.
• C) the currency of the primary economic environment in which the parent operates.
• D) the currency used by a subsidiary for its financial reporting.

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Definitions:

Owner's Drawings

A withdrawal by the owner of a business for personal use, reducing the equity in the business.

Income Summary

An account used during the closing process that aggregates all income and expense accounts to determine the net profit or loss.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or one operating cycle, whichever is longer.

Classified Balance Sheet

A financial statement that groups a company's assets, liabilities, and equity into categories, making it easier to assess financial health.