According to FASB ASC 830,Foreign Currency Matters,which of the Following

question 5

Multiple Choice

According to FASB ASC 830,Foreign Currency Matters,which of the following conditions would indicate that a foreign subsidiary's functional currency is the foreign currency?

• A)sales price not affected by changes in exchange rate in the short run
• B)high volume of intercompany transactions
• C)sales in the local market not significant
• D)Most of the subsidiary's financing comes from the parent.

---

Definitions:

Subduction Zone

A region of the Earth's crust where one tectonic plate moves under another, often resulting in volcanic activity, earthquakes, and the formation of mountain ranges.

Southeastern Asia

A geographic region in Asia that includes countries south of China and east of India, known for its diverse cultures, languages, and environments.

Tonga Island Arc

The Tonga Island Arc is a chain of islands in the southwestern Pacific Ocean formed from the tectonic subduction of the Pacific Plate under the Indo-Australian Plate, characterized by volcanic activity and earthquakes.

S-waves

Secondary or shear waves that travel through the body of the Earth during an earthquake, moving material perpendicular to the wave's direction of travel and cannot pass through liquids.