Which of the Following Is the Primary Factor in Determining

question 54

Multiple Choice

Which of the following is the primary factor in determining the functional currency of a foreign subsidiary?

• A) How the costs for the foreign entity's product are determined
• B) The denomination of the foreign entity's financing
• C) The location of the primary sales market that influences the price of the foreign entity's product
• D) Management's assessment of all relevant factors

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Definitions:

Economic Benefits

The advantages or gains received by an individual, company, or society from financial activities or investments.

Past Transactions

Previously completed financial activities or operations that a company has engaged in.

Historical Cost Principle

An accounting principle that states all assets should be recorded at their original purchase cost rather than their current market value.

Market Value

The current price at which an asset or service can be bought or sold in the marketplace, often subject to fluctuations based on supply and demand.