When Determining the Functional Currency

question 48

Multiple Choice

When determining the functional currency,

• A)if the sales prices for the foreign entity's products are generally not responsive on a short-term basis to exchange rate changes,but are determined more by local competition and government regulation,the local currency should be the functional currency.
• B)if there is an active local market for the foreign entity's products the local currency should be the functional currency.
• C)if factor of production costs for the foreign entity are primarily,and on a continuing basis,costs for components obtained from the parent's country the function currency should be the home currency.
• D)all of the options