When It Is Not Clear What the Functional Currency Is,an

question 39

Multiple Choice

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

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

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Definitions:

Citric Acid Cycle

A series of chemical reactions used by all aerobic organisms to generate energy through the oxidation of acetate derived from carbohydrates, fats, and proteins into carbon dioxide and chemical energy.

Anaerobic Respiration

A form of respiration that occurs in the absence of oxygen, allowing cells to convert glucose into energy and producing by-products such as lactic acid or ethanol.

Muscle Cramps

Sudden, involuntary contractions of one or more muscles often causing intense pain.

Evolutionary Advantage

A genetic trait that improves an organism's ability to survive and reproduce in its environment, thereby increasing its chances of passing on its genes to the next generation.