When Determining the Functional Currency

question 28

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 above

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Definitions:

Small Claims Court

A specialized court that handles disputes involving relatively small financial amounts, simplifying the legal process.

Youth Court

A specialized court designed to handle cases involving minors, focusing on rehabilitation rather than punishment.

Superior Court

A type of state or provincial court in some jurisdictions that has general jurisdiction over civil and criminal cases.

Criminal Matters

Legal issues that involve violations of criminal law, which governs offenses against the state or public order.