When the Functional Currency Is Being Determined for a Foreign

question 19

Multiple Choice

When the functional currency is being determined for a foreign operation (i.e. a subsidiary, branch, associate or joint venture, of a parent entity) , in addition to the primary and secondary indicators, all of the following factors should be considered in this determination EXCEPT

• A)Whether the foreign operation's activities are relatively autonomous of those of the parent entity or whether they are carried out as an extension thereof.
• B)The currency in which funds from financing activities are generated.
• C)Whether transactions with the parent entity are a high or a low proportion of the foreign operation's activities.
• D)Whether cash flows from the foreign operation's activities directly affect the cash flows of the parent entity and whether they are readily available for remittance to it.

---

Definitions:

Stress

A physical, mental, or emotional factor causing bodily or mental tension, which can stem from any event or thought that makes you feel frustrated, angry, or nervous.

Immune System

A complex network of cells, tissues, and organs that work together to defend the body against infections and disease.

Steroids

A type of organic compound that plays many roles in the human body, including as hormones and vitamins.

Catastrophizes

Catastrophizes refers to the tendency to overestimate the potential negative outcomes of a situation or event.