When It Is Not Clear What the Functional Currency Is

question 52

Multiple Choice

When it is not clear what the functional currency is, an accountant must use professional judgment to choose the functional currency. What is the main criterion upon which the choice should be based?

• A)Whether it faithfully represents the economic effects of the transactions and events.
• B)Whether it faithfully represents the translation effects of the transactions and events.
• C)Degree to which it minimizes accounting exposure.
• D)Whether it faithfully represents the accounting effects of the transactions and events.

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Definitions:

Shaping

A method of operant conditioning by which successive approximations of a desired behavior are reinforced until the exact behavior is achieved.

Reinforcement

In psychology, a process by which a behavior is strengthened or increased, often through rewards or positive outcomes, following its occurrence.

Empirical Approach

A method of inquiry that relies on observation, experimentation, and evidence rather than theory alone.

Behavior Therapists

Professionals who specialize in therapy that focuses on changing negative behaviors into positive ones through conditioning and other behavioral techniques.