What of the Following Factors Indicate That the Functional Currency

question 25

Multiple Choice

What of the following factors indicate that the functional currency of a foreign operation is NOT that of the reporting entity?

• A) The activities of the foreign operation are carried out with a significant degree of autonomy.
• B) There are no material inter-entity transactions or other exchanges between the foreign entity and the reporting entity.
• C) The day-to-day financing of the foreign operation is not supplied by the reporting entity and the cash flows of the reporting entity are largely unaffected by the cash flows of the foreign operation.
• D) All of the above.

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Definitions:

Total Capital

The sum of a company's debt and equity, representing the funds used to finance its operations and growth.

Partnership

Business operation legally established for dual or multiple partners to govern and split profits.

Capital Account

In finance, it relates to a financial statement detailing the investment funds brought into and taken out of a company by its owners; in economics, it represents the part of the balance of payments recording net changes in a country’s foreign assets and liabilities.

Statement Of Partners' Equity

A financial document that shows changes in the equity interest of partners in a partnership over a period of time.