Examine the Five Following Cases and Determine If the Functional

question 77

Essay

Examine the five following cases and determine if the functional currency of a U.S.parent's foreign unit is the foreign currency or the U.S.Dollar.
$\begin{array}{l}\begin{array}{|lll|} \hline\text { Scenario }\\ \hline \text { Receivables and payables denominated in}\\ \text { foreign currency are not usually remitted to }\\ \text { parent company.}\\ \hline \text { Sales prices are influenced by worldwide}\\ \text { competitive conditions and responsive on a }\\ \text { short-term basis to exchange rate changes.}\\ \hline \text { Foreign unit obtains materials primarly from}\\ \text { its own country.}\\ \hline \text { The unit's financing is taken care of through }\\ \text { ongoing fund transfers by the parent.}\\\hline \text { There is a low volume of intercompany }\\ \text { transactions and little operational}\\ \text { interrelations between the U.S. parent and }\\ \text { foreign unit.}\\\hline \end{array}\begin{array}{|lll|} \hline\text { Fumctional Courency is? }\\\hline \\\\\\\hline \\\\\\\hline \\\\\hline \\\\\hline \\\\\\\\\hline \end{array}\end{array}$

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Definitions:

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